Investment companies allow individual investors the ability to participate in the bond markets through
bond funds, closed-end funds and unit-investment trusts. In 2006 total bond fund net inflows increased
97% from $30.8 billion in 2005 to $60.8 billion in 2006. [4] Exchange-traded funds (ETFs) are another
alternative to trading or investing directly in a bond issue. These securities allow individual
investors the ability to overcome large initial and incremental trading sizes.
Bond indices
Main article: Bond market index
A number of bond indices exist for the purposes of managing portfolios and measuring performance,
similar to the S&P 500 or Russell Indexes for stocks. The most common American benchmarks are the Lehman
Aggregate, Citigroup BIG and Merrill Lynch Domestic Master. Most indices are parts of families of
broader indices that can be used to measure global bond portfolios, or may be further subdivided by
maturity and/or sector for managing specialized portfolios.
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