What is a barbell portfolio?

A barbell portfolio is divided into two sections: a low-risk side of short-term bonds and a high-risk side of long-term bonds. A bond barbell is an active strategy, since both sides will need to be repurchased as short-term bonds mature and long-term maturities shorten.

What is a barbell bond investing strategy?

The key behind a barbell bond investing strategy is close attention to the short-term bonds in a rising yield curve environment. As the short-term bonds keep maturing, they are reinvested into new short-term bonds, increasing the overall value of the investments and the value of the portfolio. How Does the Barbell Bond Investing Strategy Work?

What is a barbell strategy?

The barbell is a fixed-income portfolio strategy where half of the holdings are short-term instruments and the other half are long-term holdings. The barbell strategy allows investors to take advantage of current interest rates by investing in short-term bonds, while also benefitting from the higher yields of holding long-term bonds.