Tuesday, December 28, 2010

Bond Index Fund

A bond index fund is a passive fund which aims to produce the same returns as a bond index, e.g. the Barclays Global Aggregate Bond Index (formerly the Lehman Global Aggregate Bond Index). Within this fund type there are a range of options, such as short-term, intermediate-term, and long-term bond funds. Passive bond funds provide a satisfactory and low cost method of gaining exposure to the bond asset class, and remove the hassle as well as the potential gain of choosing a high performing active bond manager.

Synonyms: Bond fund, Passive bond fund, Bond ETF

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