Morningstar Rating

ETF Research and Analysis

by Abby Woodham
Suitability
SPDR Barclays TIPS IPE tracks a broad, cap-weighted index of Treasury Inflation-Protected Securities. This exchange-traded fund does not hold bonds until maturity, which removes the shortest-term bonds from its portfolio.  Read more 

Bull Case

TIPS let investors hedge against unexpected inflation: the possibility that the future rate of inflation is higher than the market expects.
After their price decline in 2013, TIPS now offer cheaper inflation hedging than in recent years.
The market's expected rate of future inflation is below the historical average rate of inflation. Read more 

Bear Case

IPE's duration is the highest among broad TIPS ETFs, exposing it to more interest-rate risk.
TIPS funds are not correlated with inflation. An investment in IPE will not guarantee preserved purchasing power over any time period.
If the market overestimates the future rate of inflation, Treasuries will outperform TIPS. Read more 

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