Collateralised Index
What is it?
The Markit iBoxx Collateralised Bond Index includes Euro-denominated bonds secured against specific pools of assets. These may be covered bonds, which are secured by a cover pool of mortgage loans or public sector debt, or securitised bonds, which are secured against specific assets or receivables (also known as asset-backed securities), mortgages (mortgage-backed securities) or cash flows from a whole business segment (whole business securitisations). To be eligible, bonds must have at least € 500 million (€ 1 billion for covered bonds) and at least one year remaining to maturity.
The index value is relative to a value of 100 on 31 December 1998. Weighted by market capitalization, the index is reviewed and rebalanced monthly. The daily return shows the aggregate total return for the day, including interest income plus or minus capital gains or losses based on changing prices for all bonds in the index. The arrow shows whether the daily return on the index was up, down or even for the previous day.
Why do I care?
The Markit iBoxx Collateralised Bond Index tracks the performance of Euro-denominated collateralised bonds. Charting the index over the past 12 months shows the general directions and trends in this market sector and can help investors see if the yields justify the risks. Investors can choose to use the index as a benchmark against which to measure the performance of collateralised or other Euro-denominated bonds they may hold.