Related: PGIM Investments Enters ETF Space With Short Duration Approach
Lastly, the PIMCO 15+ Year U.S. TIPS Index ETF tries to reflect the performance of the long maturity Treasury Inflation-Protected Securities or TIPS market by tracking The BofA Merrill Lynch 15+ Year US Inflation-Linked Treasury Index. The fund tracks a type of Treasury security that is indexed to inflation as a way to shield investors from the negative effects of inflation. The securities’ par value rises with inflation as measured by the Consumer Price Index while interest rate remains fixed. TIPS also offer investors another layer of diversification as many aggregate bond funds exclude TIPS from their holdings. LTPZ has a 6.52% 30-day SEC yield, a 22.04 effective duration and a 0.20% expense ratio.
CNN Money reported on Wednesday the Federal Reserve will reach its inflation target in the near future, central bank policymakers suggested the path of future rate hikes could be “slightly steeper” over the next few years than previously thought, according to minutes of their March meeting released on Wednesday.
The Fed lifted the federal funds rate to a range of 1.5% to 1.75% in March.
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