Lehman Aggregate Bond Index
Candlefocus EditorThe Lehman Aggregate Bond Index is constructed with the goal of capturing the total return of the U.S. investment-grade fixed-income market. To achieve this, it includes all publicly-traded fixed-income securities that have a minimum investment-grade rating of BBB−/Baa3, a minimum amount outstanding of $250 million, and a maturity of at least one year.
The index is weighted by market capitalization, meaning that the higher the value of bonds outstanding, the more they will influence the index. This approach enables the index to follow the performance of the largest and most liquid securities, including the U.S. Treasury and the agency debt market. This, in turn, provides a more accurate measure of the entire U.S. fixed-income market.
The Lehman Aggregate Bond Index, or “the Agg” as it is commonly called, is used extensively for benchmarking and performance measurement in portfolios and products, such as mutual funds, ETFs, money market funds, asset-backed securities and other debt-related investments. The iShares Core U.S. Aggregate Bond ETF (AGG) is an ETF that provides exposure to the Agg, enabling investors to gain exposure to the entire investment-grade bond universe in a single trade.
The Agg is one of the most comprehensive and widely-used fixed-income benchmarks in the world, providing a valuable tool for investors when looking to access the liquidity, diversification and yield opportunities of the U.S. fixed-income market. By tracking the performance of the U.S. investment-grade bond market, the index helps investors to maintain an efficient diversified portfolio and stay abreast of trends in the U.S. fixed-income space. By providing exposure to the entire investment-grade bond universe in a single trade, the iShares Core U.S. Aggregate Bond ETF (AGG) is an efficient and cost-effective way of gaining access to the U.S. fixed-income market.