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Investors will typically look at TIPS ahead of an inflationary period since buying TIPS after inflation has gone up means that the security has already priced in the inflation and investors would likely be overpaying for the TIPS exposure.
Potential investors should also be aware that TIPS are generally more volatile than traditional nominal Treasuries due to the inflation adjustments to their principal value.
Investors interested in TIPs exposure have a number of ETF options available.
TIPS ETFs:
- iShares TIPS Bond ETF (NYSEArca: TIP)
- Vanguard Short-Term Inflation-Protected Securities ETF (NYSEArca: VTIP)
- FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (NYSEArca: TDTT)
- Schwab U.S. TIPS (NYSEArca: SCHP)
- PIMCO 1-5 Year U.S. TIPS ETF (NYSEArca: STPZ)
- SPDR Barclays TIPS ETF (NYSEArca: IPE)
- iShares 0-5 Year TIPS Bond ETF (NYSEArca: STIP)
- FlexShares iBoxx 5-Year Target Duration TIPS Index Fund Profile (NYSEArca: TDTF)
- PIMCO 15 Year US TIPS Index Exchange-Traded Fund (NYSEArca: LTPZ)
- PIMCO Broad U.S. TIPS Index Exchange-Traded Fund (NYSEArca: TIPZ)
- SPDR Barclays 1-10 Year TIPS ETF (NYSEArca: TIPX)
- SPDR Barclays 0-5 Year TIPS ETF (NYSEArca: SIPE)
Global ETFs:
- SPDR DB International Government Inflation-Protected Bond ETF (NYSEArca: WIP)
- PIMCO Global Advantage Inflation-Linked Bond Exchange-Traded Fund (NYSEArca: ILB)
- iShares International Inflation-Linked Bond Fund (NYSEArca: ITIP)
- iShares Global Inflation-Linked Bond Fund (NYSEArca: GTIP)
Leveraged/inverse ETF:
- ProShares UltraShort TIPS (NYSEArca: TPS)