In the last couple of years, governments around the world have been furiously printing money. This has naturally given rise to concerns about inflation and investors have been running to TIPS exchange traded funds (ETFs) as a result. But…there’s no inflation.
TIPS are Treasury Inflation-Protected Securities
Paul Amery for Index Universe points out that the seventh-largest ETF in the United States is none other than the iShares Barclays TIPS (NYSEArca: TIP). The fund has more than $20 billion in assets, and took in nearly a quarter of that in 2009 alone. So far this year, it has raked in even more. [Treasury ETFs: In a Bubble?]
But the numbers coming from the government in recent months signal that, if anything, deflation is a more pressing concern right now. It’s a trend that analysts feel could stick around through at least the end of this year. The economic reports seem to support this: wholesale prices are down, import prices are lower and producer prices are off, as well. [ETF Plays for Inflation and Deflation.]
Tisha Guerrero contributed to this article.
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.