In a sign of how dramatically government intervention has altered the fixed-income market, Vanguard's bond index funds will switch their benchmarks this year to bogies that don't include the trillions of dollars in mortgage-backed securities the Federal Reserve is buying as part of its quantitative easing program.
Vanguard said it will start using Barclays Capital float-adjusted benchmarks for its 12 existing and proposed bond index funds and ETFs. Float-adjusted benchmarks exclude securities that do not freely trade on public exchanges, such as those held by insiders or the government.
To view this article, become a Morningstar Basic member.
Dan Culloton does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.