The UBS Composite Bond Index is designed to measure the performance of the Australian bond market. The index consists of approximately 300 fixed interest securities issued by the Commonwealth Government, the State Government and semi government authorities, as well as investment grade corporate issuers. This index provides a good representation of the movements in value and interest rates of this asset class, not unlike the ASX 200 index that most investors are familiar with.
Figure 1 above shows the return of the UBS Composite Bond Index versus the ASX 200 Accumulation Index (the index comparison starts in 1989 when the Composite Bond Index began, however Bloomberg data is only available for the graph above from 1992). If you invested $100 in each at the start date (September 1989), you would be marginally in front by investing in the bond index over the equity index.