DEFINITION of 'Lehman Aggregate Bond Index'

An index used by bond funds as a benchmark to measure their relative performance. The index includes government securities, mortgage-backed securities, asset-backed securities and corporate securities to simulate the universe of bonds in the market. The maturities of the bonds in the index are more than one year.

BREAKING DOWN 'Lehman Aggregate Bond Index'

The index constructed by Lehman Brothers is considered to be the best total market bond index, as it is used by more than 90% of investors in the United States. Along with the aggregate index, Lehman also has bond indexes tailored to European and Asian investors. This index cannot be purchased, but it is tracked by bond index funds; there also has an iShare exchanged-traded fund (ETF) that tracks the index. The Lehman Aggregate Bond Index trades on the PSE under the ticker AGG.

RELATED TERMS
  1. Total Bond Fund

    A mutual fund or exchange-traded fund that seeks to replicate ...
  2. Lehman Brothers Asset-Backed Securities ...

    A fixed-income index that focuses on asset-backed securities. ...
  3. Lehman Brothers Government/Corporate ...

    An unmanaged market-weighted index, comprised of government and ...
  4. Lehman Brothers Mortgage-Backed ...

    An index made up of mortgage-backed securities that is used for ...
  5. Index

    A statistical measure of change in an economy or a securities ...
  6. Bond Fund

    A fund invested primarily in bonds and other debt instruments. ...
Related Articles
  1. Investing

    AGG: iShares Barclays Aggregate Bond ETF

    Explore information and analysis about the iShares Core U.S. Aggregate Bond ETF that offers broad exposure to the U.S. government and corporate bond market.
  2. Investing

    Bond ETFs: A Viable Alternative

    Discover the advantages of a security that tracks bond index funds, but trades like a stock.
  3. Investing

    Evaluating Bond Funds: Keeping It Simple

    Discover some of the key factors for determining a fund's risk-return profile.
  4. Investing

    Corporate Bond Basics: Learn to Invest

    Understand the basics of corporate bonds to increase your chances of positive returns.
  5. Managing Wealth

    VBMFX: Overview of Vanguard Total Bond Market Index

    Learn about the world's largest fund, the Vanguard Total Bond Market Index Fund, including its performance and portfolio highlights.
  6. Investing

    The 3 Most Popular Vanguard Bond Index Funds

    Learn about three Vanguard bond index funds that specialize in investing in fixed-income securities with different maturities and degrees of diversification.
  7. Investing

    Case Study: The Collapse of Lehman Brothers

    Lehman Brothers survived many financial crises in its long history. Find out what finally drove it to bankruptcy.
  8. Investing

    Corporate Bonds: Advantages and Disadvantages

    Corporate bonds can provide compelling returns, even in low-yield environments. But they are not without risk.
RELATED FAQS
  1. What bond indexes follow the supply and demand for junk bonds?

    Learn about indexes that track junk bonds, why junk bonds pay more interest than other types of bonds, and how these bond ... Read Answer >>
  2. What forms of debt security are available for the average investor?

    Discover the various different types of debt securities, issued by government entities or corporations, that are available ... Read Answer >>
Hot Definitions
  1. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
  2. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
  3. Taxable Income

    Taxable income is described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments ...
  4. Chartered Financial Analyst - CFA

    A professional designation given by the CFA Institute (formerly AIMR) that measures the competence and integrity of financial ...
  5. Initial Coin Offering (ICO)

    An Initial Coin Offering (ICO) is an unregulated means by which funds are raised for a new cryptocurrency venture.
  6. The Bernie Madoff Story

    Bernie Madoff ran a multibillion-dollar Ponzi scheme that is considered the largest financial fraud of all time.
Trading Center