Just as an example, suppose you own an ETF that is similar to a 5-year bond ladder (XSB), with an average maturity of 3 years. Let's say I've accumulated enough to validate direct bond purchases, and my goal is to change it into a "real" bond ladder within 5 years. But I want to spread out the conversion a bit so that I'm not buying them all under the same interest rate conditions. So divide my holdings into 5 piles of 20%.

Year 1: Sell 20% for a 3-year bond/GIC, 80% XSB. Average maturity is still 3 years.

Y2: Now I have a 2-year bond. Sell 1/4 of remaining XSB for a 4-year bond, 60% XSB. Avg maturity still 3 years.

Y3: Now my bonds are 1 and 3 years. Sell 1/3 of remaining XSB for a 5-year bond, 40% XSB. Avg maturity still 3 years.

Y4: Now I have a 2 and 4-year bond, and one bond has matured. Buy a new 3-year bond, still 40% XSB. Avg maturity still 3 years.

Y5: Now I have 1, 2, 3-year bonds. Sell remaining XSB and buy a 4-year and 5-year bond.

So now without any abrupt shifts in portfolio duration, and without ever having to buy a bond at shorter than 3-year rates, I've converted the bond fund into a ladder. Now I have the flexibility of letting duration tick down anytime. One can play similarly with turning a longer bond fund into a longer ladder.

Just thinking out loud here, but long term this is how I'd intend to move from a bond fund to a ladder