Lehman index to remove inflation-indexed securities
In what could emerge as a blow to the fledgling market for inflation-protected securities, Lehman Brothers announced on Friday that it will remove the Treasury Department's inflation-indexed securities from its broadly-followed index of bond products.</br></br>The move will take place on Jan. 1.</br></br>Inclusion in the index had encouraged many fixed-income money managers to allocate funds to inflation-linked Treasurys, and the securities saw weakness on Friday.</br></br>Instead, the securities firm will establish a new index for global inflation-linked securities starting in October. Lehman Brothers Inc. is a unit of Lehman Brothers Holdings Inc.</br></br>"The move makes sense; the question is why they put it in the index in the first place because it's a different class of security," said John Brynjolfsson, portfolio manager for PIMCO's Real Return Bond Fund.