Explore the benefits of laddering

Explore the benefits of laddering
Key takeaways
Defined maturity ETFs can help provide income predictability

Investors can use defined maturity ETFs to build bond ladders that can help provide some stability regardless of where rates move.

Bond ladders can also enhance diversification and flexibility

Bond ladders may contain ETFs with various maturity dates, which boosts portfolio diversification. They also provide flexibility because proceeds at maturity can be reinvested or used to cover an expense.

We can help you build bond ladders

Use our interactive tool to research and build bond ladders with BulletShares ETFs.

Bond investors have endured a whipsaw environment in interest rates that has introduced more unwanted volatility to portfolios. And with continued uncertainty over Federal Reserve rate policy, inflation, and a potential recession, fixed-income investors are looking for stability.

Therefore, it’s no surprise we’ve seen renewed interest in defined maturity ETFs and how they can be used to build efficient bond ladders.

Bond ladders for some income predictability

Defined maturity ETFs can be used to build bond ladders designed to help create income stability regardless of the direction of interest rates.

Bond ladders are portfolios of bonds with sequential maturity dates. As bonds reach maturity, the proceeds can be used to fund a specific expense, such as a college tuition payment or tax bill, or reinvested in new bonds with longer maturities.

How bond ladders work: a hypothetical example
How bond ladders work: a hypothetical  example

Bond ladders that hold bonds to maturity may be particularly appealing to investors looking for some income predictability in volatile interest rate environments.

First, ladders can be customized to target specific maturity and duration profiles, giving investors more control over the portfolio’s sensitivity to changes in interest rates. Most traditional fixed income mutual funds and ETFs typically have a perpetual duration target, making them more sensitive to changes in interest rates.

With bond ladders, when interest rates are rising, investors reinvest any proceeds from bonds maturing from the ladder into new bonds with higher rates. Meanwhile, if rates fall, investors can choose to reinvest less of the maturity proceeds into new bonds with lower rates. And when rates are falling, investors may have the benefit of existing bonds that were potentially purchased at higher rates than currently.

Using BulletShares ETFs in bond ladders

BulletShares defined maturity ETFs can help investors build bond ladders more efficiently because they combine the potential benefits of individual bonds and exchange-traded funds. BulletShares ETFs let investors avoid the trading costs, research, and time of building bond ladders with hundreds of individual bonds.

Defined maturity ETFs like BulletShares have termination dates like individual bonds and they also combine the advantages of ETFs such as diversification1, liquidity 2, and transparency.3

BulletShares ETFs provide targeted exposure to investment-grade bonds, high-yield corporate bonds, and municipal bonds.

You can use our interactive tool to learn how to build customized bond ladders with BulletShares ETFs with specific investment amounts, bond asset classes, and maturity ranges.


  • 1

    Diversification does not guarantee a profit or eliminate the risk of loss.

  • 2

    Shares are not individually redeemable and owners of the Shares may acquire those Shares from the Fund and   tender those Shares for redemption to the Fund in Creation Unit aggregations only, typically consisting of 10,000, 20,000, 25,000, 50,000, 80,000, 100,000 or 150,000 Shares.

  • 3

    ETFs disclose their full portfolio holdings daily.