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close-up of hands climbing a ladder
close-up of hands climbing a ladder
(George Doyle/Getty Images)

Carrick: Another way to beat an ETF bond ladder

Want to build a better corporate bond ladder? Do it yourself instead of using a laddered bond ETF.

Bond ladders are Investing 101 stuff, but they work. By investing equal amounts of money in bonds or guaranteed deposit certificates maturing in one through five years, you ensure you have money coming due annually to take advantage of rising interest rates. And if rates fall, the risk of having to renew at lower rates is limited. Bond ladders are so basic that many exchange-traded fund companies have packaged them into ETF form. Buy the ETF and get an instant five-year ladder.