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Portfolio: Laddered Income Strategy
Category: Asset Allocation
The Laddered Income Series consists of four portfolio models with varying laddered maturities. The models are constructed by purchasing bond-based exchange traded funds (ETFs) that have fixed maturities of two to five years. After the nearest security matures, the proceeds are reinvested into a new year or they may be left in cash to cover client distributions. The fundamental investment theme behind a bond ladder is diversification by maturity. It also curbs reinvestment risk as the portfolio produces a steady stream of cash flow.