ETF Spotlight on iShares Lehman TIPS Bond (TIP), part of a recurring series.
This fund holds of a mix of U.S. Treasury bonds and notes.
TIP, which began on Dec. 4, 2003, seeks to correspond to the performance of the price and yield of the inflation-protected sector of the U.S. Treasury market. The index includes all publicly issued U.S. Treasury inflation-protected securities with at least one year remaining to maturity, rated investment grade and have $250 million or more of outstanding face value.
The fund is most heavily weighted in maturities of 5-10 years (42.9%), followed by 1-5 years (27.8%) and 15-20 years (20.4%).
This fund has a yield that equals the average interest rate of the bonds in its underlying index, and generally the interest rates change in small degrees. TIP currently has a yield of 7.06%.