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.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.