Histories of indices will be used by investors and their consultants to formulate strategic allocation policies. Asset allocators and academics also have an interest in long data histories when building allocation models. The asset–liability modeling exercises that many pension funds and insurance companies now undertake on a regular basis to review strategic benchmarks, all tend to use historical volatilities and covariances that are derived directly from index histories. There may be some advantage to investors in using the same index for the ongoing fund management benchmark as that used in the prior modeling exercise.

Conflicts of interest can only damage the standing of an index. Suspicion surrounding the motives of interested parties is almost as bad. The involvement of investment banks in index compilation tends to create such suspicions, particularly around constituent review time. Most bond indices are proprietary indices that use trader pricing. Thus they are susceptible to be biased by the positioning of the trader. For short positions, for example, the trader has an interest in pricing the bond on the lower end of the market.

Even the absence of positions on the trading book can distort an index, because those bonds are not marked actively. Indicative prices are highly susceptile to be erroneous. Hence, indices that are owned by exchangesor rely on the pricing of more than one investment bank are more likely to be accepted as independent. Especially among institutional investors the iBoxx index family has attracted a lot of interest, because it relies on pricing information of seven investment houses.