What are ladder and barbell bond strategies?

A ladder strategy spreads bond holdings evenly across multiple maturities, aiming to secure liquidity as bonds mature in turn and to diversify interest rate risk.

A barbell strategy holds only short-term and long-term bonds and no medium-term bonds, seeking both the liquidity of short-term bonds and the returns of long-term bonds. With a barbell, long-term bonds that have become medium-term must be replaced periodically, which makes management cumbersome and can incur transaction costs.