Lehman Brothers will be launching a stand-alone agency hybrid ARM Index - separate from the US Aggregate - next Monday, citing the remarkable hybrid ARM growth in recent years.

"The hybrid ARM market has come a long way from being a small, non-traditional mortgage sector a few years ago to becoming a mainstream mortgage product today," Lehman analysts wrote in announcing the index. "Not only has issuance in the sector increased several-fold in recent years, but also the demand landscape has expanded to include banks, the GSEs, index-benchmarked investors and REITs."

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