Goldman Sachs Asset Management has come out with a Treasury inflation-protected securities, or TIPS, related ETF that incorporates a rules-based or smart beta selection methodology.
On Thursday, GSAM launched the Goldman Sachs Access Inflation Protected USD Bond ETF (Cboe: GTIP), which has a 0.12% expense ratio.
“In an inflationary economic environment, GTIP provides investors with a potential hedge through its innovative screening approach to TIPS bonds,” Michael Crinieri, GSAM’s Global Head of ETF Strategy, said in a note. “The addition of GTIP further highlights the mission of our Access ETF lineup, providing investors with lower-cost bond funds.”
The Goldman Sachs Access Inflation Protected USD Bond ETF tries to reflect the performance of the FTSE Goldman Sachs Treasury Inflation Protected USD Bond Index, which is comprised of inflation-protected, fixed rate U.S. Treasury Securities denominated in U.S. dollars, according to the fund prospectus.
Fixed-rate, sovereign bonds
The underlying index screens includes fixed-rate, sovereign bonds denominated in USD that are linked to an inflation index. Only TIPS that have a minimum of 1 year to maturity and a minimum issue size of $5 billion outstanding are included.
The index also excludes securities that are unseasoned or “on-the-run” bonds, the newest issues for each security term. It also weight each constituent to match the weighted average real yield duration of the universe of securities.