Why you may want to zig when the Agg zags

Many investors use the Bloomberg Barclays U.S. Aggregate Bond Index (the Agg) as the basis for large fixed-income allocations. But the Agg has become very concentrated — it’s heavily weighted toward government exposure. In this video, Ed Kerschner explains why products that track the Agg may lead to a lack of diversification and why it’s important to look beyond the benchmark to create a more efficient portfolio.

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_{“The Agg right now is a very concentrated index….” Source: Bloomberg, 8/31/17.}

_{The Bloomberg Barclays US Aggregate Bond Index (U.S. Aggregate) is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and non-agency).}

_{The Standard & Poor’s (S&P) 500 Index tracks the performance of 500 widely held, large-capitalization U.S. stocks.
It is not possible to invest directly in an index.}

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