What is Lehman's aggregated binding index?
Lehman index is a former and best known name index of the United States Investment Class bonds. It is officially known as the Bond Bond Index Barclays index. As one of the most famous bond indices is used as the basis of several index funds.
The aim of the Lehman aggregated bond index is to monitor the performance of most investment bonds. These are bonds that meet a certain credit rating, the most important BBB or the higher of the standard and the poor. These assessments evaluate the probability that the issuer of bonds will extend the repayment, which in turn affects the interest rate it must offer to attract investors. Bonds that do not meet the minimum evaluation for investment class are commonly called unhealthy bonds. This means that it covers all relevant securities rather than selecting valuable from the largest companies or representative sample. It covers both bonds supported by the government of securities and corporate bonds.For tax reasons, the index does not apply to urban bonds or state securities that are protected from inflation.
The index is essential capitalization. This means that the index is not easily calculated by the average of the price movements of each bond. Instead, the calculation places different emphasis or weighing to different links. This weight is based on the market capital capital, which is the price of a bond multiplied by the number of bonds on the problem, or at the total market value of all bonds that are in the problem. The greater its market capitalization, the greater the effect of changing bond prices on the index.
Investors cannot invest directly in the index itself. The goal of the index is a wide range of index and funds traded on the stock exchange. This includes fund managers shopping and stores shares, so the fund's portfolio is in proportion to the index. Because the fund is weighted by market capitalization, it usually means that the administratorsFunds will have to buy bonds that grow in price and sell those that reduce the price. This may seem contrainuitive, but if the fund manager does exactly, investors will reach the fund with the total profit if the index increases.
The name of the Lehman bonds index was canceled after Lehman Brothers, which used to be operated by the index, collapsed in 2008. After the bankruptcy of the company Barclays took over several of its assets, including its index operations. The index was rebrated as an index of bond bond.