Fixed Income Investments and Strategies

Municipal Bond Ladders

Madison offers municipal bond ladders in three maturity structures (1-5 year, 1-10 year and 1-15 year) with diversified maturities throughout the portfolio. 

Investment Philosophy

Madison believes in providing valuable fixed income investment solutions which meet client needs. Laddered portfolios may be appealing to clients desiring a steady stream of income generated by a high quality portfolio. Successful execution of a laddered approach requires an appropriate balance between creditworthiness, diversification, structure and valuation. Every investment decision is paramount given our intention to hold bonds added to the portfolio through maturity. We refer to our approach as “buy and actively monitor.”

Approach to Laddered Portfolios

A bond ladder is constructed by purchasing a series of investment-grade municipal bond issues with staggered maturities. Issuer selection is vital during the initial funding of the ladder and subsequent reinvestment of cash flows. As bonds mature, the proceeds are used to purchase securities at the longer end of the maturity structure of the ladder. This process allows the client to potentially capture higher yields. Madison continuously monitors all bonds purchased and stands ready to transact in the event of credit deterioration. 

Investment Process

Our repeatable investment process is consistently applied across all tax-exempt municipal bond portfolios.

1. We craft a portfolio strategy underpinned by a top-down approach. Our team inputs macroeconomic factors into proprietary relative valuation models, then evaluates and refines output from these models.

2. We methodically construct the portfolio using a bottom-up analysis of each bond. This process strives to strike a balance between: creditworthiness, diversification, structure, valuation and liquidity.

3. We vigilantly monitor all bonds within the portfolio and stand ready to transact if credit deteriorates or to enhance portfolio characteristics.

  • This material is for informational purposes only and is not intended as investment advice or a recommendation of any particular security, strategy or investment product.

    Investment income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax. Capital gains are not exempt from federal income tax.

    Bonds are subject to certain risks including interest-rate risk, credit risk and inflation risk. As interest rates rise, the prices of bonds fall. Long-term bonds are more exposed to interest-rate risk than short-term bonds. 

  • “Madison” and/or “Madison Investments” is the unifying tradename of Madison Investment Holdings, Inc., Madison Asset Management, LLC, and Madison Investment Advisors, LLC, which also includes the Madison Scottsdale office.  Madison Funds are distributed by MFD Distributor, LLC.  Madison is registered as an investment adviser with the U.S. Securities and Exchange Commission.  MFD Distributor, LLC is registered with the U.S. Securities and Exchange Commission as a broker-dealer, and is a member firm of the Financial Industry Regulatory Authority. 

    Madison Investments shares all personnel and resources at their Madison, Wisconsin location. Statistical data is for the consolidated Madison organization. The Madison organization consists of its holding company, Madison Investment Holdings, Inc. and its affiliates: Madison Asset Management, LLC; Madison Investment Advisors, LLC; and Hansberger Growth Investors, LP. Asset information presented includes non-discretionary assets. Refer to each entity’s Disclosure Brochure for more information.