Their performance should be very similar, however, it depends on the specifics. For instance:
1) You might not get the same level of diversification from a custom ladder and typically will only get exposure to Treasury bonds since you wouldn’t be able to replicate a more diversified fund without a team of people.
2) You might experience some performance skew from maintaining the ladder. If you leave maturing bonds in cash and fail to be diligent about managing the ladder then you’ll lag an equivalent.
In short, custom ladders are just more effort than owning a series of ETFs or funds. I like to do both and hold a few bonds for my shorter holdings and then bond funds for longer maturities. That way I am only rolling a few bonds over the course of the year and it’s not a big effort.
1) You might not get the same level of diversification from a custom ladder and typically will only get exposure to Treasury bonds since you wouldn’t be able to replicate a more diversified fund without a team of people.
2) You might experience some performance skew from maintaining the ladder. If you leave maturing bonds in cash and fail to be diligent about managing the ladder then you’ll lag an equivalent.
In short, custom ladders are just more effort than owning a series of ETFs or funds. I like to do both and hold a few bonds for my shorter holdings and then bond funds for longer maturities. That way I am only rolling a few bonds over the course of the year and it’s not a big effort.
Statistics: Posted by FundQuant — Tue Jan 13, 2026 10:05 am — Replies 22 — Views 2619