Bond Futures vs Bond Index Futures


This is a really dumb question that I have been wanting to ask for weeks :

When do you use Bond Futures (the one with a CTD and Conversion Factor) and when do you use Bond Index Futures (the ones similar to Equity Index Futures but with Duration instead of Beta) ?

Obviously, we are always being told which one to use in the way the question is phrased, but it’s a pretty basic concern and I don’t have the answer to that.

As far as I can tell, for hedging you can use both. For Asset Allocation, however, you must use the Bond Index Futures by reducing Duration.

Thoughts ?

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