Reading 24. 6.3 Extreme Barbell vs. Laddered Portfolio
First paragraph compares these 2 portfolios and says in the end: “The barbell portfolio gives up nearly 30 bps in yield. Although we are using an instantaneous yield curve shift for this analysis, note that over a longer horizon, the barbell portfolio would be penalized for the give-up in yield.”
Could someone elaborate how the barbell portfolio would be penalized for the give-up in the yield over a longer horizon? How will this penalty occur?