ETF Chart of the Day: TIPS and Inflation Protection

ETF Trends

An ETF provider that has quickly raised assets across seven funds is FlexShares. Accumulating nearly $2 billion across these seven names, in a little more than 1 year of existence, we focus today on the company’s largest fund in terms of assets, TDTT (FlexShares iBoxx 3-Year Target Duration TIPS).

Despite only hitting the market in September of 2011, the fund has raised more than $700 million, and seems to be on many institutional screens as the fund trades more than 220,000 shares on an average daily basis.

Thus, the fund’s success may also be a reflection of growing institutional and retail appetite for TIPS Bond products, given the current post election environment in the U.S. with tax and inflation concerns and projections for the future.

TDTT currently has a yield of 0.88% and YTD the fund is up 2.35%. Other funds that make up the “TIPS” category in ETF land include the largest fund in the segment, TIP (iShares Barclays Treasury Inflation Protected Securities), which has a mammoth $22 billion in assets under management and is clearly one of the most popular ETFs in the U.S. period.

STPZ (PIMCO 1-5 Year U.S. TIPS) is another prominent fund, with more than $1 billion in assets under management currently, followed by others including SCHP (Schwab U.S. TIPS), STIP (iShares Barclays 0-5 Year TIPS Bond), TDTF (FlexShares iBoxx 5-Year Target Duration TIPS), LTPZ (PIMCO 15 Year U.S. TIPS), and TIPZ (PIMCO Broad U.S. TIPS). For those looking for “short” exposure to TIPS, ProShares offers TPS (UltraShort TIPS).

FlexShares iBoxx 3-Year Target Duration TIPS

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For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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