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How Have Tradable-Bond Indexes Helped Investors Position in the Credit Market?
Dec 13, 2024
MSCI MarketAxess Tradable Corporate Bond Indexes are constructed with their constituents’ relative liquidity in mind. This characteristic makes these indexes and their derivatives a suitable set of tools to implement different strategies across credit markets. For example, investors can use the ETFs and index funds tracking such tradable-bond indexes to replicate the underlying market-risk profile while benefiting from the higher liquidity of the underlying basket in the primary and secondary markets. Derivatives linked to tradable-bond indexes — e.g., index futures — can also be employed by portfolio managers to address challenges in fast implementation of credit strategies for managing an investment book and hedging.
Indexes of the most liquid bonds
MSCI MarketAxess Tradable Corporate Bond Indexes consist of the most liquid subset of investment-grade (IG) and high-yield (HY) corporate bonds. Maintaining sector and credit-bucket allocations consistent with the underlying benchmark, these indexes allow investors to track the market while positioning in more-liquid securities. These characteristics may make tradable indexes, including MSCI MarketAxess Tradable Corporate Bond Indexes and their derivatives, suitable underlying in creation of investment and hedging instruments for credit-market investors.
MSCI MarketAxess indexes of tradable corporate bonds
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Research authors
- Afsaneh Mastouri, Executive Director, MSCI Research
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