ETF Trends
ETF Trends

PIMCO, the world’s largest bond-fund manager, today launched its first on a line of exchange traded funds (ETFs) that will consist of Treasury Inflation-Protected Securities (TIPS).

Concerns that the government’s spending spree could lead to rampant inflation has boosted the popularity of TIPS.

The PIMCO 1-5 Year U.S. TIPS Index Fund (STPZ) is PIMCO’s second entry into the bond ETF market. PIMCO has expertise in the management of Treasury Inflation Protected Securities, and they will be managed by the Managing Director and Portfolio Manager Vineer Bhansali.

STPZ is the first ETF to focus specifically on the short maturity segment of the TIPS market and aims to offer investors a high degree of protection against the immediate effects of inflation on their portfolio. Shorter-dated TIPS have historically shown a significantly higher correlation with current inflation and lower volatility relative to an index that covers the entire TIPS maturity spectrum.

Next month, PIMCO expects to launch two more TIPS ETFs in order to round out the lineup. The PIMCO 15+ Year U.S. TIPS Index Fund (LTPZ) will focus on long-dated TIPS, while the PIMCO Broad U.S. TIPS Index Fund (TIPZ) will give the combined benefits of TIPS exposure across the maturity spectrum.

The other two available TIPS ETFs are:

  • iShares Barclays TIPS Bond (TIP)
  • SPDR Barclays Capital TIPS (IPE)

For more stories about TIPS, visit our TIPS category.

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.