A Review of Fixed-Income Indexing and Index Investing

Abstract

This article reviews recent issues, developments, and advances in fixed-income (FI) indexing and index investing. In particular, the authors provide an introduction to major U.S. and global families of FI indices, review key return and risk characteristics of broad-market FI indices along with their stock index counterparts, discuss various index weighting methods, and characterize the emergence of FI exchange-traded products as an important channel to execute FI index investing strategies.

TOPICS: Fixed income and structured finance, exchange-traded funds and applications, global, performance measurement