How Are TIPS ETFs Doing?

How do exchange-traded-funds (ETF) focused on Treasury Inflation-Protected Securities (TIPS) perform? To investigate, we consider ten of the largest TIP ETFs, all currently available, as follows:

• • iShares TIPS (TIP)
  • Schwab U.S. TIPS (SCHP)
  • Vanguard Short-Term Inflation-Protected Securities (VTIP)
  • iShares 0-5 Year TIPS (STIP)
  • SPDR Portfolio TIPS (SPIP)
  • FlexShares iBoxx 3-Year Target Duration TIPS Index (TDTT)
  • PIMCO 1-5 Year US TIPS Index (STPZ)
  • SPDR Bloomberg Barclays 1-10 Year TIPS (TIPX)
  • PIMCO 15+ Year US TIPS Index (LTPZ)
  • FlexShares iBoxx 5-Year Target Duration TIPS Index (TDTF)

As benchmarks, we consider iShares 1-3 Year Treasury Bond (SHY), iShares 3-7 Year Treasury Bond (IEI), iShares 7-10 Year Treasury Bond (IEF) and iShares 20+ Year Treasury Bond (TLT). To match duration of each TIPS ETF, we assign the one of these four benchmarks with the highest correlation of monthly returns. We focus on monthly return statistics, along with compound annual growth rates (CAGR) and maximum drawdowns (MaxDD). Using monthly returns for the 10 TIPS ETFs and the four benchmark ETFs as available, and concurrent monthly changes in the U.S. Consumer Price Index (CPI), through October 2024, we find that: (more…)