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What about Lehman and Morgan Stanley Indices?
carman 09-19-2008, 12:59 PM | Post #2564267 |  2 Replies
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I haven't researched this but I wonder what happens to the indices that a lot of mutual funds employ to benchmark their bond or stock funds when the issuing institution goes bust? It seems the Lehman Brothers indices were common performance benchmarks for bond and muni-bond funds while Morgan Stanlely performed that role in a lot of international funds. I guess they can switch to Russell or S&P indices, but that begs the question of how their holdings get adjusted and other trading impacts.

 We're sure living in interesting times!

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Re: What about Lehman and Morgan Stanley Indices?
Pat Morgan 09-19-2008, 2:30 PM | Post #2564296
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According to a Lehman Brothers Global Indices web page:

"Subject to the approval of the U.S. Bankruptcy Court and applicable regulators, and the closing of the transaction, as part of the proposed Barclays acquisition of Lehman Brothers' North American investment banking and capital markets operations, Lehman indices would be expected to become part of Barclays.

"Recognizing the industry significance of these indices, Barclays is committed to maintaining the family of Lehman indices and the associated index calculation, publication and analytical infrastructure and tools."

A market index is an asset of the company that owns it.  It can be sold to another company (who may decide to rename the index).  The owner of the index can get revenue from licensing the use of the index by mutual funds, exchange traded funds, and other types of investments designed to track the index.

Re: What about Lehman and Morgan Stanley Indices?
carman 09-19-2008, 7:17 PM | Post #2564453
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Pat

Thanks for clearing that up. I didn't know about the index ownership issue, but the info you provided certainly seems appropriate.

 John

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