Lehman Aggregate Breakout
Chart of the Week for July 15-20, 2005
The Lehman Aggregate Bond Index, the industry accepted bond fund index, posted strong returns for the second quarter, as yields declined across the yield curve. U.S. Treasuries had the biggest impact on the index after posting the strongest quarterly return since the third quarter of 2002. The spread sectors, corporates, mortgage-backed securities (MBS), asset backed securities (ABS) and commercial mortgage backed securities (CMBS) were also positive contributors to the aggregate index. The underperformance of Corporates versus Treasuries for a second consecutive quarter is a standout for the quarter end returns. Treasuries have benefited from a flight to quality from foreign and U.S. investors because Corporates have suffered recent rating downgrades in the auto industry.
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