How to build a bond ladder

Reduce your risk to interest rate volatility by building a 'bond ladder' portfolio. Phil Oakley explains how.

Rock-bottom interest rates make it hard to get decent levels of income from your investments without taking lots of risk. While some stocks offer an attractive income, the ups and downs of the stock market are just too uncomfortable for some people.

So, investing in bonds has always been seen as a good alternative for those who want a regular income, with less volatility (fewer ups and downs).

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Treasury December 20152%113p1.77%£20,000£354
Treasury March 20185%114p4.39%£20,000£877
Treasury March 20204.75%115.6p4.11%£20,000£822
Treasury March 20224%111.78p3.58%£20,000£716
Treasury September 20232.25%96.582.33%£20,000£466
Total incomeRow 5 - Cell 1 Row 5 - Cell 2 Row 5 - Cell 3 Row 5 - Cell 4 £3,235
Portfolio yieldRow 6 - Cell 1 Row 6 - Cell 2 Row 6 - Cell 3 Row 6 - Cell 4 3.23%

Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.