FTSE Russell has been marking some significant anniversaries in the last couple of years: the Russell US indexes and the FTSE 100 turned 40 in 2024, while the WMR FX benchmarks celebrated their 30th birthday.
But perhaps no index series had a more profound impact on the way the underlying markets are categorised, analysed and traded by investors than the FTSE World Government Bond index (FTSE WGBI), which turns 40 in January 2026.
In the latest episode of the FTSE Russell Index Ideas podcast, Robin Marshall, director of fixed income research at FTSE Russell, talks about the multi-decade legacy of the FTSE WGBI.
He begins by explaining the reasons for the index’s introduction:
Back in the early 80s, there was much less overseas investment in bond markets. Investors tended to stick to their own domestic markets.
Robin Marshall
“But it was becoming important for investors to look at overseas markets and diversify portfolios. And that required a global standard for a bond index and also, importantly, a benchmark for the performance of those international markets. So these were the important drivers for the WGBI: having a high global standard of consistency and a benchmark for performance for international portfolios,” said Marshall.
In the podcast, Marshall goes on to discuss:
- How the ownership and oversight of the WGBI have changed
- Why market makers no longer determine the index’s bond prices
- Why the number of constituent markets has gone from 9 to 24
- Who decides on a market’s inclusion in the WGBI and based on what criteria?
- How the credit rating and duration of the WGBI have changed over time
- How asset allocators use the WGBI in constructing portfolios
- The FTSE WGBI ecosystem and popular new variants of the index
The government bond market is at the centre of the infrastructure for pricing a whole range of asset classes,
Robin Marshall
“It gives you the risk-free rate, say on a ten-year or five-year bond, whichever maturity you want. And if you're benchmarking other asset classes, you want to have some means of valuing them against a risk-free rate. An index like the WGBI gives you that,” concludes Marshall.
LISTEN TO THE PODCAST
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