Bond market index

There are numerous indices of differing construction that are designed to measure the aggregate bond market and its various sectors (government, municipal, corporate, etc.)

During this period it became increasingly apparent that most portfolio managers were unable to outperform the bond market.

This resulted in the development of passively managed bond index funds, and the proliferation of indices themselves.

Since bond indices typically contain more securities than stock indices, passive bond fund managers face a more difficult task than their stock index fund counterparts with respect matching the performance of their benchmark.

For example, in 1986 Salomon Brothers introduced a bond index designed specifically for large pension funds "seeking to establish core portfolios that more closely match the longer durations of their nominal dollar liabilities.