Bond Indices


Bond indices are an effective way to benchmark your portfolio and track performance over time. They also offer broad diversification and liquidity, two important qualities of a healthy market.

More About Bond Indices

Continue reading to learn more about:

How do bond indexes work?
What are the rules for indices?
What is the difference between an index and an index?
What are the major bond indices?
What are stock and bond indexes?


1 Step 1
keyboard_arrow_leftPrevious
Nextkeyboard_arrow_right

How do bond indexes work?


Bond indexes, or bond indices, are standardized statistical calculations of the market value of a particular segment or segments of the fixed income markets. The performance of these indices is thought by many to be a generalized measurement of the bond market’s overall performance.


 
 

What are the rules for indices?


The rules for investing in an index are that you cannot select specific securities but rather buy a fund that is made up of securities representative of a particular stock market index. Indices are broad metrics that measure a portfolio's performance by using mathematical calculations on the prices of the underlying securities. An index is also a statistical yardstick used to measure performance patterns.

 

What is the difference between an index and an index?

Index and indices are both forms of the word index. An index is a noun meaning "a usually alphabetical list of items (such as topics or names) treated in a printed work together with the page numbers on which those items are mentioned." 
Indices is an alternative plural form, preferred in scientific and economic writing, but still considered incorrect by purists. In stock indices, an index refers to an aggregate number that measures market changes.
 
  • What are the major bond indices?

    There are several different bond index families, including Bloomberg Barclays Indices, STOXX, S&P Dow Jones, FTSE Russell Indices, Citigroup World Government Bond Index (WGBI), Bank of America Merrill Lynch Global Broad Market Index (GBMI), and JPMorgan Government Bond Indices (GBI), covering different markets, segments, and sectors.
  • What are stock and bond indexes?

    Stock and bond indexes are unmanaged, market-value-weighted indices used to measure asset class dynamics over time. They also provide access to potential diversification benefits. This is a passive investment approach that seeks to replicate the performance of the underlying index net of fees, rather than taking an active approach and attempting to outperform the underlying index.