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The cracked benchmark? Why some investors want a new standard for bonds


Is one of the most important benchmarks on Wall Street in need of a serious upgrade?

The Bloomberg Barclays U.S. Aggregate Bond Index, the fixed-income index that is essentially synonymous with the U.S. bond market, much as the S&P 500 SPX, -0.04  is for equities, has drawn criticism from major investors and analysts, who view it as an insufficient gauge for measuring the entirety of the bond universe. It certainly has ardent defenders, and even critics of the AGG—as the index is informally known—recognize its centrality to the economy at large, as well as its adherence to its stated mission. However, they view that mission as unnecessarily narrow.

“It’s time for investors to break away from the AGG, and look for tools better suited for today’s modern investment environment,” wrote Matthew Bartolini, head of SPDR Americas research at State Street Global Advisors, in a June blog post entitled, “Why I Quit the AGG, and Why You Should Too.”


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