US Treasury inflation-protected securities (TIPS) are bonds the US government issues. The inflation protection comes in the form of face value adjustments by the US Treasury based on the Consumer Price Index (CPI), which is the main measure of inflation. TIPS ETFs may not perform as well as other ETFs, such as technology, growth or even dividend ETFs in the long term, but in times of inflation, they can be a worthwhile investment. They’re also a hedge against future inflation. In a deflationary economy, however, TIPS ETFs will perform poorly compared to other types of bonds and ETFs.
3 TIPS ETFs to consider
TIPS ETFs give you access to these inflation-protected bonds without directly buying the bonds. Due to the nature of the investment, TIPS ETFs that access US bonds perform roughly the same. I compared 16 TIPS ETFs and chose the top three that offered the highest year-to-date (YTD) returns or that had the highest one-year returns. Two of these ETFs track either a different measure of inflation or track the TIPS in other countries, which is why they outperform the rest.
1. ProShares Inflation Expectations ETF (RINF)
This ETF is the best performer out of all TIPS ETFs. It also outperforms many other types of ETFs. The ProShares Inflation Expectations ETF tracks the FTSE 30-Year TIPS Index. The index is designed to measure the performance of the Break Even Rate of Inflation (BEI), which is a different measure of inflation than the standard. Other ETFs track the standard measure, which is the CPI. This is why the performance of this ETF and other TIPS ETFs differ.
YTD gain (June 2021): 11.99%
1-year gain (June 2021): 25.37%
Expense ratio: 0.30%
2. SPDR FTSE International Government Inflation-Protected Bond ETF (WIP)
This ETF provides exposure to inflation-linked bonds of developed and emerging market countries. The way the ETF does that is by tracking the FTSE International Inflation-Linked Securities Select Index. As of February 28, 2021, the index covered the following countries: Australia, Brazil, Canada, Chile, Colombia, France, Germany, Israel, Italy, Japan, Mexico, New Zealand, South Africa, South Korea, Spain, Sweden, Turkey and the United Kingdom.
YTD gain (June 2021): -1.14%
1-year gain (June 2021): 10.17%
Expense ratio: 0.50%
3. iShares TIPS Bond ETF (TIP)
iShares TIPS Bond ETF TIP offers direct exposure to the entire Treasury Inflation-Protected Securities yield curve for one of the lowest fees. This ETF tracks the Bloomberg Barclays US Treasury Inflation-Linked Bond Index, which includes US TIPS with at least one year until maturity.
YTD gain (June 2021): 0.02%
1-year gain (June 2021): 4.92%
Expense ratio: 0.19%
Compare trading platforms
1 - 8 of 8
Bottom line
TIPS ETFs offer exposure to bonds issued by the US government or other governments. But unlike standard bonds, TIPS ETFs have a principal that adjusts based on certain measures of inflation. Because of this perk, investors often use them to protect their portfolios against inflation. If you’re not sure this is a worthwhile investment for you, compare the best ETFs to find the right one for your needs.
Paid non-client promotion. Finder does not invest money with providers on this page. If a brand is a referral partner, we're paid when you click or tap through to, open an account with or provide your contact information to the provider. Partnerships are not a recommendation for you to invest with any one company. Learn more about how we make money.
Finder is not an advisor or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
Kliment Dukovski was a personal finance writer at Finder, specializing in investments and cryptocurrency. He's written more than 700 articles to help readers compare the best trading platforms, understand complex investment terms and find the best credit cards for their needs. His expert commentary has been featured in such digital publications as Fox Business, MSN Money and MediaFeed. He’s also well-versed in money transfers, home loans and more — breaking down these topics into simple concepts anyone can understand. In another life, Kliment ghostwrote guides and articles on foreign exchange, stock market trading and cryptocurrencies. See full bio
Kliment's expertise
Kliment has written 101 Finder guides across topics including:
How likely would you be to recommend Finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
