Given Treasury Inflation-Protected Securities (TIPS) are sensitive to interest-rate changes, using them as a short-term inflation hedge can present challenges; worse, as this note discusses, in some cases TIPS are a certifiably bad inflation hedge.
This note, which excerpts from an analysis conducted by Bloomberg Intelligence's Ira Jersey, examines ways for investors to better hedge inflation risk vs. being outright long in TIPS or ETFs. Institutional-investor flows into TIPS ETFs rebounded earlier this year, yet have since normalized.
Inflation-Index Returns Overwhelmed By Rate Moves
