The gyrations of the bond market of recent years have underscored a simple, but often-overlooked, truth about index bond portfolios: performance often varies, sometimes significantly, from the indexes they are designed to track. This four-pager by Greg Curran, Standish Mellon director of index strategies, explains the fundamentals of bond index management, and how we seek to ensure that performance does not differ significantly from the underlying benchmark. This includes:

• Careful replication of the benchmark structure
• Adding value through security selection
• Managing credit risk and mortgage exposure
• Strict investment controls

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This information is the property of Standish Mellon Asset Management Company LLC, and shall not be sent to any third party.  This information is not provided as a sales or advertising communication.  It does not constitute investment advice.  It is not an offer to sell or a solicitation of an offer to buy any security.  Past performance is not an indication of future performance.  This information is not intended to provide specific advice, recommendations or projected returns of any particular Standish Mellon product.