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FlexShares iBoxx 5 Year Target Duration TIPS Index Fund (NYSEARCA:TDTF - Get Free Report) saw a significant increase in short interest in the month of February. As of February 27th, there was short interest totaling 59,502 shares, an increase of 79.9% from the February 12th total of 33,083 shares. Based on an average daily volume
Decades-high inflation has fixed-income investors looking for ways to protect their buying power and the value of their investment assets, prompting keen interest in Treasury Inflation Protected Securities, commonly referred to as TIPS. TIPS are commonly misunderstood, however, even among financial professionals.
Christopher Huemmer offers some perspective for investors dealing with the current investment environment.
Investors can incorporate exposure to certain asset classes to help mitigate the corrosive effects of inflation on a traditional portfolio. Inflation in the U.S. has continued to increase.
Investors looking for a way to hedge inflation are increasingly looking to TIPS, or Treasury inflation-protected securities. Most bonds pay investors a set amount of interest semiannually and then pay the original face value of the bond at maturity; TIPS, however, are marketable securities whose principal is adjusted by changes in the Consumer Price Index.
The inflation rate climbed to 7% during December 2021, highlighting the need for fixed income investors to get exposure to short duration and Treasury inflation-protected securities (TIPS). Investors are realizing this, and the flow of money into TIPS funds tells the story.
At the November FOMC meeting, the Fed officially announced that it would begin tapering its bond purchase program, starting in mid-November. When the Fed began tapering its QE3 program over the course of 2014, the coupon supply from the U.S. Treasury was stable, leading to an increase in net supply takedown from the private market.
Getting inflation protection is one thing, while targeting duration is another. Both can be accomplished with the FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (TDTT) and the FlexShares iBoxx 5-Year Target Duration TIPS Index Fund (TDTF).