Fixed Income
Madison Corporate Bond Ladders
Strategy Overview
Madison’s Corporate Bond Ladders are actively monitored bond portfolios designed to provide a stable income stream while preserving capital. The strategy invests in investment-grade U.S. corporate bonds that we actively research and continuously monitor. The ladder structure helps limit interest rate risk by systematically reinvesting proceeds at the longest end of the maturity distribution. We offer three laddered maturity structures: 1-3 years, 1-5 years, and 1-10 years.
Key Facts
| Strategy Inception | October 2014 |
|---|---|
| Investment Vehicles | Separate Account |
| Investible Securities | Investment-grade U.S. Corporate Bonds |
| Typical Holdings Range | 25-35 issues |
| Minimum Average Credit Quality | A- |
| Minimum Credit Quality Per Issue | Investment-grade |
| Maturity Structures | 1-3 year 1-5 year 1-10 year |
Experienced Management
Mike Sanders, CFA®, FRM®
Head of Fixed Income, Portfolio Manager
Allen Olson, CFA®
Portfolio Manager, Analyst
Alan Shepard, CFA®
Portfolio Manager, Analyst
Investment Process
Madison’s Corporate Bond Ladders are constructed by purchasing a series of U.S. corporate bonds with staggered maturities across the desired maturity range of the portfolio. As bonds mature, the proceeds are used to purchase securities at the longer end of the maturity structure.
Our credit team continuously conducts independent, in-house credit research, assigning our own security ratings. In addition, we closely monitor all issuers held in client portfolios and stand ready to transact in the event of credit deterioration.
Defining Characteristics
Steady income generation
Maturities are evenly spaced throughout the applicable maturity range, allowing for a steady stream of income and reinvestment flow.
Extensive credit research
Independent, in-house credit research prioritizes quality securities and actively monitors all issuers held in client portfolios. We stand ready to transact in the event of credit deterioration.
Liquidity
An emphasis on purchasing liquid issues with large floats, typically over $500 million, provides flexibility within the portfolio.
Diversified and transparent
Portfolio is well-diversified across sectors, industries, and issuers. The separate account format provides complete transparency of holdings.
Madison Fixed Income Team
Mike Sanders, CFA®, FRM®
Head of Fixed Income, Portfolio Manager
Michael Massel, CFA®
Credit Analyst
Jeffrey Matthias, CFA®, CAIA®, CIPM®, CFP®
Portfolio Manager
Chris Nisbet, CFA®
Portfolio Manager, Analyst
Allen Olson, CFA®
Portfolio Manager, Analyst
Michael Peters, CFA®
Portfolio Manager, Analyst
Alan Shepard, CFA®
Portfolio Manager, Analyst
Arissa Wallander
Fixed Income Analyst
Related Insights
In addition to the ongoing market risk applicable to portfolio securities, bonds are subject to interest rate risk, credit risk and inflation risk. When interest rates rise, bond prices fall; generally, the longer a bond’s maturity, the more sensitive it is to this risk. Credit risk is the possibility that the issuer of a security will be unable to make interest payments and repay the principal on its debt. Bonds may also be subject to call risk, which allows the issuer to retain the right to redeem the debt, fully or partially, before the scheduled maturity date. Proceeds from sales prior to maturity may be more or less than originally invested due to changes in market conditions or changes in the credit quality of the issuer.
Diversification does not assure a profit or protect against loss in a declining market.
Float represents the cash or near-cash holdings within the bond ladder that provide liquidity and flexibility for reinvestment.