Best Of TIPS ETFs: Expenses, Dividends, and Returns

ETF Database

As central banks around the world continue to plow money into the financial system, investors have been bracing for an eventual uptick in inflationary pressures. While reported inflation throughout the developed world has remained tame–most markets are well within their official “comfort zone”–anxiety over rising prices remains. When the global economy stabilizes and consumers become more able to bear price increases, many expect CPI to spike [see Black Swan Hyperinflation ETFdb Portfolio].

There are a number of different tools for combating inflation. Some swear by commodities, which logically tend to appreciate when inflation arrives. Others believe equities make for a good bet in inflationary environments. But perhaps the most common tool for “inflation-proofing” a portfolio are inflation-protected bonds, securities whose face value adjusts based on reported inflation metrics.

ETFs have become common vehicles for holding TIPS; the Inflation Protected Bonds ETFdb Category consists of more than a dozen exchange-traded products, including domestic and international funds, with aggregate assets of almost $30 billion [see a list of all ETFdb Categories].

The Pro member download from the Inflation Protected Bonds ETFdb Category page can be used to highlight the funds with the lowest expenses, highest dividend yields, and best historical performance [see a sample Excel download here; Pro members can download more than 60 ETFdb Category pages and 200 ETFdb Types pages with a free 7-day trial].

View photo



TIPS ETFdb Category
Number of ETFs 13
ER Range 0.14% to 0.50%
Total Assets $28.3 billion
As of June 6, 2012
Cheapest TIPS ETFs

There is a relatively wide range of expenses for TIPS ETFs; some funds charge as little as 14 basis points while others (WIP) have expense ratios of up to 0.50% annually.

The cheapest TIPS ETF is the U.S. TIPS ETF (SCHP) at 0.14%, followed by the SPDR Barclays Capital TIPS ETF (IPE) at 0.18%.

[Use the free ETF Screener to filter ETFs by sector and region exposure, as well as expenses and volume]

Commission Free TIPS ETFs

There are three ETFs in the TIPS ETFdb Category that are eligible for commission free trading, including:

Most Heavily Traded TIPS ETF

On an average day, the ETFs in the TIPS ETFdb Category trade more than 1.7 million shares. The most heavily traded ETF in this category is the Barclays TIPS Bond Fund (TIP) , which has an average daily volume of about one million shares.

Realtime Ratings: TIPS ETFs
Metric Top ETF Rating
Liquidity  Barclays TIPS Bond Fund (TIP) A+
Expenses  U.S. TIPS ETF (SCHP) A+
Performance  15+ Year U.S. TIPS Index Fund (LTPZ) A+
Volatility  Barclays 0-5 Year TIPS Bond Fund (STIP) A+
Dividend  SPDR DB International Government Inflation-Protected Bond ETF (WIP) A+
Concentration  International Inflation-Linked Bond Fund ETF (ITIP) A+

[Get access to Realtime Ratings for 1,400+ ETFs with a free 7-day trial to ETFdb Pro]

Best Performing TIPS ETFs

Though TIPS are generally through of as a very safe asset class that exhibits low risk and low return, some of these funds have delivered huge gains recently. As of June 6, 2012, the best performing TIPS ETFs are as follows:

Best Performers
1 Year 15+ Year U.S. TIPS Index Fund (LTPZ) +27.84%
3 Years SPDR Barclays Capital TIPS ETF (IPE) +33.49%
5 Years SPDR Barclays Capital TIPS ETF (IPE) +49.54%
As of 6/6/2012
Highest Yielding TIPS ETFs

TIPS ETFs aren’t generally known for high dividend payouts–the low risk involved generally translates into lower yields–but some products in this ETFdb Category have meaningful dividend yields (as of June 6, 2012):

Most Balanced TIPS ETFs

When comparing potential ETF investments, it is important to evaluate how deep and balanced the underlying portfolios are. Depth refers to how many individual securities comprise an ETF, while balance refers to how “top heavy” a product is–what percentage of assets are concentrated in the ten largest individual positions.

Disclosure: No positions at time of writing.

Click here to read the original article on

Related Posts:

View Comments (0)

Recommended for You

  • Chicago Fed's Evans wants no rate hikes until early 2016

    The Federal Reserve should wait until next year before raising interest rates or risk undermining the very recovery it has helped engineer, a top U.S. central banker said on Wednesday.

    12 mins ago
  • How a 25-year-old sparked the plunge at Lumber Liquidators

    Xuhua Zhou took an interest in Lumber Liquidators about two years ago. His digging ultimately led to lawsuits, a “60 Minutes” report and accolades from the well-known short seller Whitney Tilson.

    12 mins ago
  • Facebook's Instagram rolls out new 'carousel' ads

    Instagram will let brand marketers showcase more images on its photo-sharing smartphone app, the Facebook-owned service’s latest move to expand its money-making advertising features.

    12 mins ago
  • Exxon may delay spending after 2017 if down market persists

    Exxon Mobil Corp, the world's largest publicly traded oil company, said on Wednesday its output would rise slowly through 2017 and it may delay some investments thereafter if crude prices stay low. Oil prices have halved since June, and major oil companies have been trimming budgets for projects to bring expensive and hard-to-find new discoveries online. "The oil and gas business is cyclical and we've been here before," Rex Tillerson, Exxon's chief executive officer told a meeting of Wall Street analysts. Still, Tillerson expects the downturn to persist for some time because of the resilience of North American shale oil supplies, and because some supplies crimped by political instability could come back online at any moment.

    12 mins ago
  • Clinton ran own computer system for her official emails

    The computer server that transmitted and received Hillary Rodham Clinton's emails — on a private account she used exclusively for official business when she was secretary of state — traced back to an Internet ...

    12 mins ago
  • Crude reality: Oil poses biggest political risk

    Low oil prices will compound political risks across emerging markets this year, according to a new report released Wednesday.

    12 mins ago
  • China's 'changing reality' a challenge and opportunity for the West: Wharton Dean

    Many of the things we take for granted about China are changing. We take a look at what this means for U.S. companies and the American consumers.

    12 mins ago
  • U.S. private sector adds jobs in February, but growth slows -ADP

    U.S. private employers added fewer jobs than expected last month, with the gains declining as well from January's revised level as growth slowed in some sectors, a payrolls processor report showed on Wednesday. The ADP National Employment Report, jointly developed with Moody's Analytics, showed a gain of 212,000 private-sector jobs. Economists surveyed by Reuters had forecast the ADP to show a gain of 220,000 jobs. For instance, service-providing employment rose by 181,000 jobs in February, compared with growth of 206,000 in the sector in January.

    12 mins ago
  • Fraud Starts to Take a Bite Out of Apple Pay

    It didn’t take long for fraud to find its way to Apple Pay. Some banks are witnessing a growing incidence of fraud on Apple Inc.’s mobile-payment service as criminals exploit vulnerabilities in the verification process banks follow when users add a credit card to the service, according to people familiar with the matter. The problem was brought to light in late February in a blog post by Cherian Abraham, a payments expert who works with banks and retailers on mobile-payment strategies. Mr. Abraham said it isn’t “an anomaly” for fraud to account for about 6% of Apple Pay transactions, compared with about 0.1% on transactions that involve swiping a credit card.

    12 mins ago
  • US mutual funds cut expenses by shifting billions to trusts

    Mutual fund companies, including No. 2 Fidelity Investments, have slashed fees on their most popular funds by shifting billions of dollars into collective trusts not regulated by the U.S. Securities and Exchange Commission. The growing shift to collective trusts could prove a weapon for actively managed mutual funds losing out to low cost passive investment products such as the exchange-traded funds offered by rivals such as Vanguard Group, the biggest mutual fund company. "CITs are more opaque to the outside world because reporting requirements are not as stringent," said Michael Rawson, manager of research at Morningstar Inc. Retirement plans sponsored by Delta Air Lines Inc cut fees by 23 percent last year when they shifted an estimated $1 billion in assets managed by Fidelity's Contrafund into a collective investment trust (CIT).

    12 mins ago