iShares Lehman Bond ETF (TIP) has been a popular exchange traded fund (ETF) choice for investors all around the world.

Carl Delfeld at ETF XRAY explains that these Treasury-inflation protected securities (TIPS) are a simple way to eliminate one of the most threatening risks to fixed-income investments-inflation.

As inflation expectations build for the U.S. economy, ETF options are becoming even more interesting to investors. What’s more, TIPs deliver a real rate of return guaranteed by the U.S. government and they also keep their pace with inflation as defined buy the Consumer Price Index.

The Treasury yesterday auctioned $8 billion in 10-year inflation-adjusted TIPs T-notes. These are also popular among foreign central banks as witnessed by 42.9% of indirect bidders. Foreign investors appear to be buying up these bonds.

Tags: Bond ETFs