Sign up  |  Log in

Laddered bond portfolio

Why is a laddered portfolio protected from shifts and twists in the yield curve?

Schweser CFA® study packages are the key to CFA exam success. Serious about the passing the CFA exam? Just choose Schweser.

Whooaaa…you’re way ahead of me! Haven’t even gotten to fixed income yet!

Big Dreams Require Big Sacrifices - VWJETTY

I did not start from book 1.

Let me attempt to answer. In a laddered portfolio, you are invested in different bonds with different maturities (short-term to long-term). Hence if interest rates rise, you will be able to take advantage from the cash you get back from short term investments. If interest rates fall, then you are able to sell long term investments at a higher price.