Market Minute - February 9, 2018
by Scott Rosenquist, CFA
BLOOMBERG BARCLAYS US AGGREGATE BOND INDEX
The Bloomberg Barclays US Aggregate Bond Index is one of the more popular bond indices that covers the broad bond market similar to the S&P index as related to the stock market. It is often referred to as the “AGG” for short. Formerly known as the Lehman Aggregate Bond Index and then the Barclays US Aggregate Index, the index dates back to 1986. The bond market has certainly changed since then but let us take a look at what makes up this popular index.
The ‘AGG’ is a market weighted index comprised of US investment grade securities including treasuries, corporate bonds, and mortgage backed securities (MBS) and other securitized bonds. Market weighting gives the issuers with the largest amount of debt outstanding a higher weighting in the index. The ‘AGG’ is also commonly used by investment managers as a benchmark for performance of U.S. investment grade bond portfolios.
Since the 2008 financial crisis, this bond market index has changed in terms of composition and investment characteristics. Let’s explore these changes next month and the implications they may yield.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual. Although general strategies are revealed, this post is not intended nor does it reflect transactions within any one account. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All data and information is gathered from accurate sources but is not warranted to be correct, complete or accurate. Investments carry risk of loss including loss of principal. Past performance is never a guarantee of future results.