Article Excerpt:
"'TIPS investors benefit from a rise in inflation because their value changes in line with the Consumer Price Index,' said Matthew Tucker, head of enhanced and index fixed-income strategy at San Francisco-based Barclays Global Investors, which oversees the TIPS ETF.
TIPS can reduce overall portfolio risk because their prices tend not to move in lockstep with stocks and conventional bonds.
For example, buying a 10-year inflation-protected bond with a 2 percent coupon locks in a yield 2 percent above inflation. If inflation averages 3 percent over that decade, the bond's yield equates to a 5 percent 10-year Treasury - absent a portion of the risk."
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ETF Investing: TIPS ETF offers solid hedge against inflation's bite - Financial - Financial Services - Bond Market - Economy - Markets/Exchanges - Mutual Funds - Market News:
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