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U.S. Corporate Bond Ladders

Nuveen
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Strategy description

The U.S. Corporate Bond Ladders portfolios seek to provide current income and regular maturities by building equally-weighted portfolio of high quality corporate securities that will typically be held to maturity or sold as they reach the portfolio minimum maturity.

Asset class: Taxable fixed income

For term definitions and index descriptions, please access the glossary in the footer.

Portfolios at-a-glance

  1-5 Year Corporate Ladder 1-7 Year Corporate Ladder 1-10 Year Corporate Ladder 1-15 Year Corporate Ladder Custom Corporate Ladder
Maturity Ranges 1-5 years 1-7 years 1-10 years 1-15 years Custom
Credit Quality Range AAA to A– AAA to A– AAA to A– AAA to A– AAA to A–
Average Quality Target A A A A A
Maximum issuer exposure1 15% 15% 15% 15% 15%
Range of Holdings1 12-16 12-16 18-22 28-32 Varies

 

Investment process

Diversified maturities and credit risk can help provide predictable income

 

  Customization Options and Implementation Examples
  For $250,000+ accounts
  Credit Quality
Limit, restrict or target certain ratings categories

Example
Increase exposure to BBB rated bonds to enhance yield
Responsible investing
Target Environmental Social Governance (ESG) leadership

Example
Apply ratings to identify ESG leaders by industry
Industry/issuer
Limit or exclude certain industries or securities

Example
Limit corporate bonds to 50%, exclude energy companies or apply values-based screens
  Maturity/duration
Set a target or maximum maturity or duration

Example
Maximum maturity of 10 years or duration less than 3 years
Distributions
Set up regular withdrawals for income

Example
Manage maturities and cash balances to fund monthly withdrawals
Transition/tax awareness
Hold or gradually transition securities; Address tax management needs

Example
Transition existing securities slowly to avoid tax implications; tax gain or loss harvesting

 

Nuveen can be flexible in responding to requests for these and other appropriate customizations. 

For more information contact your financial advisor.


Resources

 


 
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1. Concentration in a small number of holdings may increase risk exposure. A $250,000 account in these strategies may hold 8-32 individual bonds, depending on the strategy, under normal circumstances. The number of bonds may vary and may be greater or fewer based on factors such as account size, client transactions and market conditions. Accordingly, one or more individual bonds may each represent greater than 10% of the account. A decline in value of any one or more individual bonds may have a material impact on the account value.

2. This strategy does not utilize the opportunistic and more active trading approach found in certain other Nuveen bond strategies.

A separately managed account (SMA) is a private portfolio of actively managed, individual securities that may be customized to achieve an individual investor's unique objectives.

SMA accounts typically require a minimum investment of $100,000 for equity and asset allocation strategies and $250,000 for fixed income strategies, although the specific minimum account size varies by program and may be subject to change. The manager may waive these minimums based on client type, asset class, pre-existing relationship with client and other factors. For certain accounts, a negotiated minimum annual fee applies. Please consult with your Nuveen Advisor Consultant for applicable minimums.

Check with your financial advisor for specific product availability and performance information. This information may change without notice. From time to time, we may close or reopen strategies.

Please note that laddered strategies may not lend themselves to certain types of customizations including, but not limited to: sector restrictions, requests to replace individual bonds, and certain client trading such as tax sales. The laddered bonds will typically be held to maturity in the absence of material credit events, contributions/withdrawals and calls. Initially, Nuveen will purchase individual bonds that are given equal weight, with differing maturities across the specified strategy maturity range. The maturity range is typically segmented into 1 year ranges ("rungs"). Nuveen will typically purchase 1-2 bonds in each rung creating a "ladder" of individual bonds. As bonds mature (or are called) and cash is generated in the account, Nuveen will purchase additional bonds in the longest available rung within the strategy's bond maturity range.

A word on risk
All investments carry a certain degree of risk and it is important to review investment objectives, risk tolerance, tax liability and liquidity needs before choosing an investment style or manager. Debt or fixed income securities are subject to credit risk and interest rates risk. The value of and income generated by debt securities will decrease or increase based on changes in market interest rates. Credit risk refers to an issuer’s ability to make interest and principal payments when due. Bonds may be callable, which may increase the interest rate risk exposure in the portfolios. Upon call, a client may be confronted with a less favorable interest rate environment than the one that existed when the original bond was purchased.

Nuveen Asset Management, LLC is a registered investment adviser and an affiliate of Nuveen, LLC.