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Western Asset Municipal Bond Ladders (1-15 Years)

As of 09/30/2025

Year to Date Returns (Net)

2.16%

 
 

Year to Date Returns (Pure Gross)

3.58%

 

Overview

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Investment Overview

The Western Asset Municipal Bond Ladders seek to deliver tax-free income opportunities while preserving capital and reducing interest rate risk by investing in laddered municipal bonds. The strategy invests in a diversified portfolio of credit-monitored investment-grade municipal securities with equally weighted maturities from 1-15 years.

Investment Objective

The strategy seeks to maintain a competitive level of tax-free income while preserving principal by investing — and reinvesting — in a well-diversified portfolio of investment-grade municipal bonds with laddered maturities.

We believe:

  • Laddered portfolios may offer advantages over self-managed portfolios in creating a stable stream of income
  • Ladders represent a disciplined approach that allows investors to manage changes in interest rates
  • Credit monitoring may enhance income by providing opportunities to allocate across the full range of investment-grade securities
  • A diversified set of municipal bonds with staggered maturities and coupon stream may provide continued opportunities for reinvestment
Key Differentiators

Team-managed approach

  • Team unites groups of specialists dedicated to different market sectors
  • Each group of specialists draws on its distinctive expertise in the bottom-up analysis of its respective sector, to efficiently implement and monitor the portfolios

In-depth bond research

  • Looks across sectors and issues to select attractive income opportunities and ensure diversification when reinvesting cash flows

Overseen by a fixed income leader

  • A highly regarded proprietary credit research team that selects and monitors
  • Over four decades of municipal bond trading, with access to the full inventory of municipal offerings and the ability to purchase quality securities
  • Exclusive focus on fixed income management
  • Long tenure in managing separately managed accounts in taxable and tax-exempt markets

Diversification does not guarantee a profit or protect against a loss.

Build your own Municipal Bond Ladder. Estimate potential income and get a free client report in 3 easy steps. Try it now!

Why Invest in a Municipal Bond Ladder?

  • Help minimize impact of rising rates by allowing municipal bonds to roll down curve until maturity
  • May provide greater income from investing at potentially higher rates
  • May benefit from owning well-diversified portfolio of individual bonds, and ongoing professional credit monitoring

Investment Process

Investment Process

Step 1 - Identify Term Structure of Ladder

Term structure

  • Purchase municipal bonds maturing at regular intervals from 1-15 years (Other options may be available.)
  • Hold securities to maturity and reinvest back out at longest maturity rung of ladder
  • Manage reinvestment risk by staggering maturities and coupon streams across a diverse mix of sectors and issuers

Step 2 - Identify Attractive Sectors and Industries

Sector and issue decision

  • Employ in-depth research to uncover yield opportunities across the investment-grade rating spectrum
  • Winnow portfolio candidates using proprietary credit analysis

Step 3 - Build Diversified Portfolio of Preferred Issuers

Review/sell process

  • Monitor credits constantly, despite intent to hold all securities until maturity
  • Reexamine whether a particular investment should continue to be held when the issuer’s ability to pay the coupon or repay upon maturity is in doubt

The investment process may change over time. The characteristics set forth above are intended as a general illustration of some of the criteria the strategy team considers in selecting securities for client portfolios.

Meet Your Manager

Western Asset

Western Asset Management is one of the world's leading global fixed income managers. Founded in 1971, the firm is known for team management and proprietary research, supported by robust risk management and a long-term fundamental value approach.

Performance

Portfolio

Documents

Product Literature

PDF Format

Factsheet - Western Asset Municipal Bond Ladders (1-15 Years)

Risks

What Are the Risks?

All investments involve risks, including possible loss of principal. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Liquidity risk exists when securities or other investments become more difficult to sell, or are unable to be sold, at the price at which they have been valued. Portfolios focused on a single state are subject to greater risk of adverse economic and regulatory changes than a geographically diversified portfolio.

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