Inflation

US 1-10YR Gov’t Inflation - Linked Bond Index

Intermediate TIPS Offer More Efficient Means of Inflation Protection

Intermediate TIPS reduce interest rate risk and long-term return expectation and lower expected risk, with the additional benefit of a higher historical correlation to the Consumer Price Index (CPI), an aggregate measure of consumer goods and services commonly used for identifying periods of inflation or deflation.

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  Broad TIPS Intermediate TIPS
Long-Term Expected Return -0.02% 0.4%
Long-Term Expected Risk 1.5% 1.2%
Yield to Worst (%) 1.34 1.19
Option Adjusted Duration (Years) 4.44 2.07
Historical Correlation to CPI 0.16 0.25