Lehman Aggregate Bond Index

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. Index

    A statistical measure of change in an economy or a securities ...
  4. Lehman Brothers Government/Corporate ...

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

    An index made up of mortgage-backed securities that is used for ...
  6. Bond Buyer Index

    An index published by The Bond Buyer, a daily finance newspaper ...
Related Articles
  1. Mutual Funds & ETFs

    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. Mutual Funds & ETFs

    Bond ETFs: A Viable Alternative

    Discover the advantages of a security that tracks bond index funds, but trades like a stock.
  3. Mutual Funds & ETFs

    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.
  4. Mutual Funds & ETFs

    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.
  5. Home & Auto

    How To Choose The Right Bond For You

    Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy.
  6. Mutual Funds & ETFs

    The Top 5 Bond Mutual Funds for 2016

    Learn about bond mutual funds that investors may want to consider for 2016. Understand why the risk of rising interest rates is a concern heading into 2016.
  7. Bonds & Fixed Income

    The Top 5 Core Bond Funds for 2016

    Learn about mutual funds that are appropriate for core bond holdings. Read about how the expense ratios for mutual funds can impact investor returns.
  8. Stock Analysis

    3 Index Funds with the Lowest Expense Ratios

    Read detailed information about index mutual funds with some of the lowest expense ratios in their categories, and learn about their pros and cons.
  9. Mutual Funds & ETFs

    Bond Funds Boost Income, Reduce Risk

    These funds can provide stable returns for those who depend on their investment income.
  10. Bonds & Fixed Income

    The Top 5 Long-Term Bond Funds for 2016

    Understand how long-term bond mutual funds can benefit an investor's portfolio, and learn the best long-term bond mutual funds for 2016.
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 >>
  3. Is it possible to invest in an index?

    First, let's review the definition of an index. An index is essentially an imaginary portfolio of securities representing ... Read Answer >>
  4. Why are simple-interest loans preferred by payday loan companies and pawn shops?

    Learn how you can invest in the corporate bond market without investing a large amount of capital through bond funds and ... Read Answer >>
  5. Can mutual funds only hold bonds?

    Find out which mutual funds include only bonds in their portfolios. Learn why some funds invest in different types of bonds ... Read Answer >>
  6. What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields ... Read Answer >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center