What is a barbell bond portfolio?

A barbell bond portfolio is an investment portfolio that comprises both short-term and long-term bonds wherein one half of the portfolio consists of short-term bonds and the other half consists of long-term bonds.

Should you invest in a barbell portfolio?

The barbell portfolio strategy can be effective for bond investors who don't want to risk having too much of their capital tied up in long-term bonds in case rates rise. By keeping a portion of the portfolio in short-term bonds, you can keep more cash accessible for investing in new bonds.

What is a barbell investment strategy?

The barbell is an investment strategy applicable primarily to a fixed income portfolio. Following a barbell method, half the portfolio contains long-term bonds and the other half holds short-term bonds. The “barbell” gets its name because the investment strategy looks like a barbell with bonds heavily weighted at both ends of the maturity timeline.