We know municipal bond ladders don’t work in the long run, but should a sound investing approach require surrendering control of your portfolio?

We don’t think so.

This question came to mind after reading a recent note on the generations-old notion of laddering bonds – investing in staggered maturities in an attempt to outsmart future yield changes.

Attractive yields

For one thing, laddering may limit options for investors.

Consider that while yields have declined from their 2025 peak, they remain elevated compared with levels earlier in the decade. Recent developments indicate the Federal Reserve Board may move cautiously in lowering rates, which suggests that while yields may fluctuate, they could remain higher than the unusually low levels we’ve seen for much of the early 2020s.

Given today’s attractive yields, investors are better served by evaluating bonds as opportunities arise rather than confining purchases to a ladder’s preset maturities.

Changing yield curves

Furthermore, changes in interest rates have created value across different bond maturities. In recent years, the yield curve has often been unusual, with higher yields available at both short and long maturities compared with the middle of the curve. Some investors respond by moving between different maturity ranges.

Interest rates and yield curves can change quickly. Instead of being constrained by the dictates of laddering, investors can benefit from focusing first on quality and then on yield. Over time, investors will often find the most compelling value on the long end of the curve, which invariably provides more tax-free income, the reason investors buy muni bonds in the first place.

Choice amid issuance

Finally, there has been a surge in municipal bond issuance. Issuance accelerated in 2024, hit a record last year and could reach a new high this year. Ample supply often creates significantly more choices for investors.

By restricting investors to predetermined maturity targets, laddering can limit an investor’s ability to benefit from better yields outside those narrow windows.

Maintain flexibility

Rather than relying on ladders or delegating control of their portfolio – often associated with Separately Managed Accounts or SMAs (“Champagne Prices for Water?”) – investors can remain in charge while drawing on a deep well of experienced and knowledgeable professionals to assist when necessary.

Our investors remain involved in decisions about the quality, maturity and income objectives of their municipal bonds and are supported by specialists whose sole focus is municipal bonds.

Avoiding ladders doesn’t require investors to surrender control or limit their choices. Thoughtful, successful municipal bond investing can be as simple as identifying bonds that fit an investor’s objectives and having trusted assistance available when needed.

We’ve seen it work for five decades.