Published on 29 Apr 2024 on etf.com via Yahoo Finance
Is the Agg Enough for Your Fixed Income Portfolio?
Fingers on a calculator
Just as investors regard the S&P 500 or various equity market indexes as representative of the U.S. stock market, many believe the Bloomberg U.S. Aggregate Index (the Agg) is the proxy for the entire U.S. bond market.But unlike the stock indexes, the Agg (and its sister index, the float-adjusted version) only offers partial exposure to a U.S. bond market. And keep in mind that the U.S. bond market makes up only 40% of the global fixed income market.That means investors who track the Agg in their fixed income allocations miss out on a wider playing field, which would increase diversification and offer the opportunity to outperform.