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Bond Indices Education and Training

Understand bond indices before making purchases

By Felicia R. Blue
Discover how bond indices can help you make wise decisions when it comes to purchasing bonds. Bond indexes comprise of a listing of bonds. Professional or institutional investors use these indexes to monitor bonds' performances.

There are many different bond indexes in the marketplace. Some track short or long-term bonds while others are global government and emerging markets indexes. You don’t have to attend school in order to understand bond indices. Use the Internet to educate yourself on bond indices. Here are three ways to obtain bond indices education and training:

1. Become knowledgeable about various bond indices from videos and financial providers' websites.

2. Watch webcasts in order to get information about bond indices.

3. Study guides to learn how to use bond indices help minimize your investment risks.

 

Learn about the different bond indices from videos and financial providers' educational websites

There are many bond indexes in the bond market. Although you should learn them, it's more important to know what sectors they track. For example, you will want to become familiar with regional bond indexes. This is important if you're looking to purchase bonds from emerging markets. One of the best ways to learn about and purchase these bonds is to study regional bond indices.
Try: SuTree has a video that educates you on the Lehman Aggregate Bond Index. This bond index is well-known for tracking taxable-bond funds. Morningstar offers comprehensive bond indices education and training, including white papers and presentations. You can access the bond index directories on its website.

Obtain information about bond indices from watching webcasts

By watching webcasts, you can learn why and how revenue bond indexes are created. You can learn what the bond index tracks. For example, it may track sector bonds, such as Treasury or corporate bonds. You'll be learning how to monitor the bonds' performances.
Try: BNet offers webcasts on bond indices education and training. You’ll learn about how the first bond index was created. FINRA also provides webcasts on bond indices. You can learn how to evaluate risks before buying bonds.

Learn from guides how to use bond indices to reduce your investment risks

Learn how professional bond traders and brokers use bond indices to monitor bonds that will fit their their investment objectives. As a result, these help traders and brokers to cut down on their investment risks. They can then focus their time on looking at the quality and duration of bonds. Another way that traders and brokers can curtail their investment risks is by purchasing and selling ETFs (exchange traded funds). ETFs tend to mirror corporate bond and Treasury bond indices.
Try: BNY Mellon Asset Management has a guide, A Guide to Bond Index “Flavors”, that you can download from its website. You will get good bond indices education and training in that you will learn how bond indices can help achieve your investment goals. ICI (Investment Company Institute) also has a guide, A Guide to Exchange-Traded Funds, from which you will learn how to use ETFs to track corporate and Treasury bond indices.

 

  • Create a database of bond indices so that it's easy to track them. Make sure your database not only contains the bond index name, but the sector it's tracking.

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