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iShares TIPS Bond Message Board

  • pat2ric pat2ric Jun 20, 2011 6:42 PM Flag

    TIP vs WIW

    I stumbled upon a closed-end fund that oven Tips. It is trading at a 9% percent discount to it's NAV.It is run by Guggenheim.And I was wondering what you guys think.You can go to Guggenheim web-site for detailes.
    My oppinion.
    If and when we do get inflatiom ,this fund will trade above it's NAV.
    Thank you

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    • I'm not a big fan of closed end funds. Based on the size of the discount, the market doesn't seem to be either.

      One reason there might be a discount is due to the difference in fund expenses.

      The expense ratio for WIW is a whopping 0.75% (as seen on their website) vs. just 0.2% for TIP. In general, you will earn 0.55% per year more with TIP than WIW once fund expenses are taken into consideration. Perhaps the market is pricing that in.

      Over the long haul, Guggenheim funds is the clear winner here in my opinion. It shouldn't take 0.75% per year in fees to manage a simple TIPS portfolio.

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