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 Market

    The environment in which the issuance and trading of debt securities ...
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

    Corporate Bond Basics: Learn to Invest

    Understand the basics of corporate bonds to increase your chances of positive returns.
  4. 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.
  5. Investing

    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. 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.
  7. Investing

    Corporate Bonds: Advantages and Disadvantages

    Corporate bonds can provide compelling returns, even in low-yield environments. But they are not without risk.
  8. Investing

    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.
  9. Investing

    The Best Bet for Retirement Income: Bonds or Bond Funds?

    Retirees seeking income from their investments typically look into bonds. Here's a look at the types of bonds, bond funds and their pros and cons.
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 >>
Hot Definitions
  1. Racketeering

    A fraudulent service built to serve a problem that wouldn't otherwise exist without the influence of the enterprise offering ...
  2. Aggregate Demand

    The total amount of goods and services demanded in the economy at a given overall price level and in a given time period.
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Blue Chip

    A blue chip is a nationally recognized, well-established, and financially sound company.
  5. Payback Period

    The length of time required to recover the cost of an investment. The payback period of a given investment or project is ...
  6. Collateral Value

    The estimated fair market value of an asset that is being used as loan collateral. Collateral value is determined by appraisal ...
Trading Center