Investors flooded into the product in the immediate aftermath of the U.S. election, placing bets that the new administration would stoke inflation by enacting pro-growth fiscal policies. Amid a lack of progress on the legislative front, inflows had largely petered out,” according to Bloomberg.
The $23.3 billion TIP is the largest TIPS ETF on the market. TIP holds 35 securities and has an effective duration of 7.6 years. Duration measures a bond’s sensitivity to changes in interest rates.
For more information on Treasury inflation protected securities, visit our TIPS category.