Evenly Weighted SMAs
January 1, 2020

Roll with the Punches of Rising Interest Rates

One of the biggest challenges corporate and municipal bond investors face when it comes to portfolio performance is interest rate fluctuation. Changing interest rates can increase risk and decrease investment value. Incorporating a separately managed account made up of evenly weighted bonds into an investment strategy may help reduce risk and make it easier to withstand rising interest rates.


An evenly weighted portfolio gives proportional weight to bonds based on their market capitalizations and can provide investors with a more defensive portfolio structure than one with staggered maturities. Additionally, capturing both the interest rate term structure roll and the credit roll in an evenly weighted laddered portfolio may be a useful strategy to combat rising interest rates. This paper explores the impact of rising interest rates and how adopting a laddered portfolio structure may help investors roll with the punches of rising rates without feeling the lasting effects.


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Thomas Luster Headshot

Tom Luster, CFA

Managing Director, Taxable SMA Strategies
Thomas Luster Headshot

Tom Luster, CFA

James Evans Headshot

Jim Evans, CFA

Chief Investment Officer, Fixed Income
James Evans Headshot

Jim Evans, CFA

Jonathan Rocafort

Jon Rocafort, CFA

Managing Director, SMA Portfolio Management
Jonathan Rocafort

Jon Rocafort, CFA

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