Groundlearn / Glossary / Yield curve strategy
Yield curve strategy
A CFA term, defined in plain English with the distinction examiners test.
What it means
Positioning a bond portfolio for an expected change in the shape of the curve — bullet, barbell or ladder structures expressing different views.
The exam angle
A barbell outperforms a duration-matched bullet when the curve flattens, and has more convexity. Duration alone cannot express a curve view.
Where it appears in the syllabus
- Portfolio Management pathwayCFA Level III · exam weight 30–35% · Active equity, yield-curve and credit strategy, LDI, trade execution.
- Fixed IncomeCFA Level II · exam weight 10–15% · Term structure dynamics, arbitrage-free valuation, embedded options, CDS.
Related terms
- Active shareThe proportion of a portfolio’s holdings that differs from its benchmark, from 0% for an index fund to 100% for no…
- Derivatives overlayAdjusting a portfolio’s exposures with derivatives while leaving the underlying holdings untouched.
- Fundamental law of active managementExpected active return is a function of skill, the number of independent decisions taken, and how fully those…
- Implementation shortfallThe difference between the return on a paper portfolio and the return actually achieved, capturing delay, market…
- Market impactThe adverse price move caused by the act of trading itself.
- Risk budgetingAllocating a portfolio’s total risk across strategies or managers, rather than allocating its capital.
Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
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