Sentences with phrase «of a bond index»

I'm a fan of bond index funds for the fixed - income portion of a portfolio.

The fund adjusts its allocations daily based upon equity and bond market volatility, correlation between the bond and equity indexes, and the yield - to - maturity of the bond index.

As a result, key characteristics of a bond index, such as the average maturity of bonds in the index, can change every year.

By locking in current low rates for a longer period of time, the duration of the bond indices has increased to historic lengths.

Many of the bond indexes, therefore, track the actual underlying price movement of the bonds, although some will directly track bond yields.

The treatment of issuers with different credit ratings has always been problematic for sponsors of bond indices.

The fund adjusts its allocations daily based upon equity and bond market volatility, correlation between the bond and equity indexes, and the yield - to - maturity of the bond index.

Although bonds do not have voting rights, ESG considerations can be applied to the construction of bond indexes similar to how they are for equity indexes.

That means it tends to dampen down the volatility of a bond index, because when interest rates are rising, bonds are falling, we fall less.

(This is true of bond index funds, too.)

The vast majority of bond index funds sell them before maturity because major bond indexes provided by BarCap (ex-Lehman) all have minimum maturity clauses, forcing them to sell the bonds early in order to track the index properly.

To find out more about the S&P Dow Jones Bond Indices, click here, or click on one of these links if you'd rather watch a short video about the basics of the bond index, or about what is inside the broad bond index or about the bond sectors.

A number of bond indices exist for the purposes of managing portfolios and measuring performance, similar to the S&P 500 or Russell Indexes for stocks.

Like stock indexes, most of the bond indexes use a limited number of bond issues to chart the price movement of a larger universe of bonds.

The important point is this: as the duration of indexes increases and as credit quality decreases, the expected long - term return of a bond index increases to compensate for those extra risks.

This article provides an overview of bond indexes and ways you may consider using them to follow...

Stratified sampling allows us to select a subset of bonds that have similar characteristics of a bond index, without having to hold every single bond.

To create her portfolio, Susan bought $ 30,000 (60 % of $ 50k) of a stock index fund and $ 20,000 (40 % of $ 50k) of a bond index fund.

«If the stock market drops by roughly 20 per cent or more,» he adds, «I'll rebalance by selling some of my bond index to buy some of my stock indexes.»