Bond Ladder Tool from Fidelity
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Clicking a link will open a new window. Bond Ladder Tool
The Fidelity Bond Ladder Tool can help you build a portfolio of bonds that mature at staggered intervals. These intervals are the "rungs" of the ladder, which are designed to help create a consistent stream of income over time. , or use a self-directed approach. Simplified interactions Intuitive design allows you to build your ladder on one page that includes educational content to make it easier to understand your options. Summary calculations View estimated income and in chart format for your ladder before you purchase it. Generate dependable income1 Depending on the bonds in your ladder, income payments can be scheduled monthly, quarterly, or semiannually. Provide ongoing liquidity If you structure your ladder to have bonds expire at regular intervals, cash can be available on a consistent, scheduled basis (assuming no default by the issuer of the bond). Reduce reinvestment risk If rise, you may benefit from purchasing higher-yield bonds with the income from the bonds already in your ladder. If rates fall, bonds with future would continue to be locked into the initial higher yields (assuming they are not callable).2 Questions
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Take a video tour of the bond ladder tool and learn how you can build a portfolio of bonds to help create a consistent stream of income over time. Learn about using bond ladders, barbells, and bullets to help diversify across maturity dates when investing in individual bonds. Defined Maturity Funds (DMFs) are a professionally managed and innovative way to invest in municipal bonds. Sample bond ladder reports*
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. Any fixed income security sold or redeemed prior to maturity may be subject to a loss. A bond ladder, depending on the types and amount of securities within the ladder, may not ensure adequate diversification of your investment portfolio. While diversification does not ensure a profit or guarantee against loss, a lack of diversification may result in heightened volatility of the value of your portfolio. You must perform your own evaluation of whether a bond ladder and the securities held within it are consistent with your investment objective, risk tolerance and financial circumstances. To learn more about diversification and its effects on your portfolio, contact a representative: 800-343-3548. * These hypothetical reports are provided for educational purposes only and were not produced by the online bond ladder tool. The securities listed in the sample reports are for illustrative purposes only. 1. Dependable income is subject to the credit risk of the issuer of the bond. If an issuer defaults no future income payments will be made. 2. Assuming no default by the issuer of the bond. Fidelity Investments does not provide tax or legal advice so you may want to consult an attorney or tax advisor regarding the portfolio of bonds you have identified before purchasing your ladder. 449919.18.5 Footer
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interest rate
the annual rate, expressed as a percentage of principal, payable for use of borrowed money debt obligation principal
an interest-bearing promise to pay a specified sum of money (the principal amount) on a specific date; bonds are a form of debt obligation; categories of bonds are corporate, municipal, treasury, agency/GSE maturity maturity date s
the date on which the principal amount of a fixed income security is scheduled to become due and payable, typically along with any final coupon payment. It is also a list of the maturity dates on which individual bonds issued as part of a new issue municipal bond offering will mature rung
one of the bonds that make up a bond ladder; each bond represents a rung in the ladder