The Finesse Bond Index measures the performance of a portfolio of government bonds of varying maturities with purchases staggered as follows: Short-term bonds have maturities of 1 year to 3 years: Six 1-year bonds are held; one bought every 2 months; six 2-year bonds bought every 4 months; and six 3-year bonds bought every 6 months. Intermediate bonds have maturities of 5, 7, or 10 years, with six 5-year bonds bought every 10 months; seven 7-year bonds bought every year; and ten 10-year bonds bought every year. The long-term Bond Index has ten 20-year bonds bought every 2 years, and ten 30-year bonds bought every 3 years. Bonds are valued and yields to maturity are recalculated every month based on changes in the country’s 30-day T-bill rate. Bond interest is assumed to be paid every month, and no deduction is made for bond commission expense. If a government bond yield is unavailable for a particular term, the bond yield is interpolated based on the closest bond terms.
