# Barbell vs. Bullet

Source: https://www.yieldcurve.pro/learn/barbell-bullet

**Barbell** and **bullet** are the two fundamental ways to structure a fixed-income portfolio along the maturity spectrum while maintaining the same overall duration.

A **barbell** concentrates holdings in the short and long ends of the curve (e.g., 2-year and 30-year bonds). A **bullet** concentrates holdings in a single intermediate maturity (e.g., 10-year bonds). Both can be constructed to have the same duration, but they respond differently to curve movements.

Key differences:

- **Convexity**: the barbell has higher [convexity](https://www.yieldcurve.pro/learn/convexity) than the bullet at the same duration, because convexity increases with the square of maturity and the 30-year wing contributes disproportionately
- **Carry**: the bullet typically has higher [carry](https://www.yieldcurve.pro/learn/carry) because the intermediate sector often sits on the steepest part of the curve
- **Curve exposure**: the barbell benefits from a flattening curve (the wings outperform the belly), while the bullet benefits from a steepening curve

The Salomon Brothers yield curve primer (Parts 6 and 7) provides the canonical framework for barbell-bullet analysis:

- In a **stable rate environment**, the bullet outperforms due to its carry advantage
- In a **volatile or rallying environment**, the barbell outperforms due to its convexity advantage
- The breakeven is the level of yield volatility at which the convexity advantage offsets the carry disadvantage

A barbell-bullet trade — long the barbell, short the bullet (or vice versa) — is equivalent to a [butterfly spread](https://www.yieldcurve.pro/learn/butterfly-spread) and isolates exposure to yield curve curvature.