TIPS: TEMPERING INFLATION'S IMPACT

Executive Summary

Treasury Inflation-Protected Securities (TIPS) have become increasingly important in portfolio management as investors seek protection against inflation risks. This analysis explores the role of TIPS in modern portfolio construction and their effectiveness in different market environments.

Key Findings

• TIPS provide direct inflation protection through principal adjustments
• Performance characteristics differ significantly from nominal Treasury bonds
• Portfolio diversification benefits extend beyond simple inflation protection
• Market dynamics affect relative value opportunities