TIPS let investors hedge against unexpected inflation: the possibility that the future rate of inflation is higher than the market expects.
Because STPZ buys the short end of the TIPS maturity curve, it is more correlated with inflation than funds that buy the entire spectrum of TIPS.
Individual TIPS are taxed each year on their inflation adjustment, even though investors don't receive most of the adjustment until maturity. STPZ pays out the adjustment. Read more