Merrill launches fixed interest index
Merrill Lynch has launched a broad index of Australian debt securities that is one of the final building blocks in its soon-to-be-launched global index.
Merrill Lynch has launched a broad index of Australian debt securities that is one of the final building blocks in its soon-to-be-launched global index.
The Australian Broad Market Index tracks investment grade Australian dollar denominated debt of sovereign, quasi-government and corporate issuers domiciled in investment grade countries.
Including 122 bonds with total capitalisation of more than $132 billion, the index, together with comparable indices for the United States, Canada, Pan-Europe and Japan, will be included in a Merrill Lynch Global Broad Market Index, to be launched next month.
Merrill Lynch & Co managing director Phil Galdi says "explosive growth" in the attention in-vestors pay to debt market indices prompted the creation of the new product.
He says increasingly difficult to interpret and changing market environments have increased in-dice use.
"As new markets evolve, there's a new need for new performance standards," Galdi says.
Increasing use of corporate debt as a primary source of return in fixed income portfolios, driven by declining yields and supply in the government debt markets, has also pushed up the use of indices.
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