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Bloomberg Indices Unveils Comprehensive US Total Fixed Income Market Index for Investors

Bloomberg Indices has officially announced the launch of the Bloomberg US Total Fixed Income Market Index (Ticker: TOTALFI), a significant development in the world of fixed income investing. This new market-value weighted benchmark aims to encompass the full range of the investable US fixed income universe, which includes various asset classes traditionally sought by fixed income managers.

A New Era in Fixed Income Indexing

The creation of the TOTALFI index represents a shift towards a more inclusive approach that eliminates constraints typically associated with sectors, credit ratings, and coupon structures. It encompasses a wide range of fixed income assets, from US Treasuries and investment-grade credit to high-yield bonds, mortgages, structured credit, leveraged loans, inflation-linked securities, and floating-rate securities.

By offering a holistic measure of the entire fixed income market, the index provides increased transparency and performance metrics across essential asset classes that have evolved alongside market changes. As stated by Nick Gendron, the Global Head of Fixed Income Index Product Management at Bloomberg Index Services Limited, this index is designed to keep pace with the rapid expansion of the fixed income markets in terms of both size and complexity.

Complementing Established Benchmarks

The US Total Fixed Income Market Index will complement Bloomberg’s flagship US Aggregate Bond Index (the 'Agg'), which has long served as the cornerstone of core fixed income exposure. The Agg is known for its clarity and liquidity, adequately representing the US investment-grade markets. The introduction of the TOTALFI index not only broadens the range of investment opportunities but also allows for diversification across all sectors within the fixed income landscape.

Enhanced Investment Flexibility

The newly launched index is poised to offer investors the flexibility to balance risk while achieving a deeper understanding of the interrelationship among the broader components of the fixed income markets throughout various economic cycles. It's important to note that the TOTALFI index is expected to reflect a higher credit risk and lower duration than the Agg due to the expansion of included sectors. However, historical data suggests that this combination can lead to enhanced performance and lower volatility over the long term, especially compared to traditional investment-grade indices.

In a recently published report titled 'Measuring the Total Fixed Income Market: A Comprehensive Indexing Framework,' the Bloomberg Index research team delves into the advantages of this new indexing approach and its implications for investment strategies moving forward.

Access and Documentation

For those interested in exploring the new index, Bloomberg clients can conveniently access it through the Bloomberg Terminal using the code {{TOTALFI INDEX }}. Furthermore, comprehensive research and methodology documents can be found on the Bloomberg Indices Documentation page, providing critical insights into the index's construction and utility.

About Bloomberg Index Services Limited

Bloomberg's index team is renowned for its innovative approach to constructing leading indices across various asset classes, including fixed income, commodities, and equities. Bloomberg Index Services Limited (BISL) is dedicated to offering strategic benchmarks that cater to the evolving needs of market participants. By integrating extensive and reliable data with advanced technology for calculations and analytics, Bloomberg aims to enhance the visibility and accessibility of its products.

A Commitment to Transparency

Bloomberg has established itself as a global leader in providing business and financial information, aiming to promote transparency and efficiency in markets. Through dependable technology solutions, the company connects communities within the global financial ecosystem, empowering clients to make informed decisions and collaborate effectively. For further information, check out Bloomberg's official website.

In conclusion, the launch of the Bloomberg US Total Fixed Income Market Index marks a significant milestone for investors looking to navigate the complexities of the modern fixed income landscape. Offering broader access to diverse asset classes while supporting strategic decision-making, this index is set to redefine the standards for fixed income investing.