Mutual Funds Tracking Lehman Indices Unaffected by Lehman Bankruptcy

Many Sensible Financial clients hold exchange traded mutual funds that track bond indices provided by Lehman Brothers.

Tickers include AGG, SHY, IEF, TLT, and TIP.

All of the investments in these mutual funds are US Treasury bonds. They are unaffected by the bankruptcy of the Lehman Brothers Holding Company.

The underlying investments (the bonds themselves) are held by State Street Bank as custodian on behalf of shareholders. State Street Bank specializes in “back office” businesses such as custody.

These funds are all advised by Barclays Bank (under the brand name iShares). However, even if Barclays were to have difficulty (which I do not anticipate in any way), the underlying investments in Treasury bonds would remain.

Eventually, it is likely that the index business of Lehman Brothers will be sold, and the indices may be renamed. However, the mutual funds will not be affected by this potential name change.