Lehman Brothers said this week it has expanded its municipal bond index to meet new requirements by the Securities and Exchange Commission and to improve investors' ability to evaluate municipal bond investments.
The company also said it plans to unveil new state-specific indexes keyed to New York State and California bond issues.
Lehman said it named Muller Data Corp., a securities pricing and fixed-income information service, to provide pricing evaluations for the enhanced index. The Bond Buyer's Muni-View database will be used to identify bonds which meet the index's criteria. Muller Data and The Bond Buyer are both owned by Thomson Financial Services.
The index enhancements are designed to comply with a new SEC rule, effective July 1, that requires mutual funds to select broad-based bond issues for comparisons, a press release from Muller Data says.
Michael Craft, head of Lehman's municipal strategies group, said each of the 20,000 bonds in the municipal bond index will be weighted according to par amount outstanding and market price.
"In addition to comparing performance, the indices will also be useful for comparing the risk characteristics of various municipal portfolios," Craft said.