For Financial Intermediary Use Only. Not For Retail Distribution.
Laddered bond strategy example
Laddered bond strategies are popular with investors looking for a stream of income, a diversified
solution, and the unique benefits associated with individual bond ownership. A laddered portfolio
is constructed by purchasing multiple bonds, each with different maturity dates. The graphic
below illustrates a 10-year ladder with 10% of the total assets invested in each year of the ladder.
When the one-year bond matures, the proceeds are reinvested in a 10-year bond to maintain the
ladder's structure. This design helps investors manage the risk of rising or falling interest rates.
If rates are rising, the maturing principal can be invested at higher rates. If they are falling, the
portfolio is still earning interest on the longer-term holdings that have not yet matured.
SEI portfolio characteristics
• Target credit range: Investment grade
• Target position size: 5%
• Sector allocations: Corporate 90% to 100%
• Typical number of holdings: 15-25
Maturity
11
