Investments, tenth edition

  Bond Market Indicators 

 Just as stock market indexes provide guidance concerning the performance of the overall 

stock market, several bond market indicators measure the performance of various catego-

ries of bonds. The three most well-known groups of indexes are those of Merrill Lynch, 

Barclays (formerly, the Lehman Brothers index), and Salomon Smith Barney (now part 

of Citigroup).  Figure 2.9  shows the components of the U.S. fixed-income market in 2012.  

 The major problem with bond market indexes is that true rates of return on many 

bonds are difficult to compute because the infrequency with which the bonds trade 

makes reliable up-to-date prices difficult to obtain. In practice, some prices must 

be estimated from bond-valuation models. These “matrix” prices may differ from true 

market  values.    

 Table 2.6 

 Sample of MSCI stock indexes 

 Source:  MSCI, www.msci.com. Used with permission.