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This Inflation-Protected Bond Fund Is Seeing Massive Inflows

Monday, November 7, 2016 11:41
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BondsJust one day before the U.S. Presidential election, we see a U.S. Government Bond linked ETF leading all ETPs in near term inflows: the iShares Barclays TIPS Bond Fund ETF (NYSE:TIP).

TIP currently boasts an expense ratio or 0.20% as well as a massive $20.6 billion in assets under management. That total has been bolstered by year-to-date inflows of $5.5 billion in new assets via strong creation demand, including $1 billion in new assets appearing in the past several days alone.

TIP is one of several north of $1 billion funds in the Inflation-Protected Bond space, having debuted in December of 2003 and building a notable >$20 billion asset base as of current levels. TIP has a commanding lead for asset supremacy in this space, as it is nearly ten times the size of the next largest fund in the space, VTIP (Vanguard Short-Term Inflation-Protected Securities, Expense Ratio 0.10%), which has $2.6 billion in AUM and mild inflows year-to-date of $544 million in.

TDTT (FlexShares iBoxx 3-Year Target Duration TIPS, Expense Ratio 0.20%, $1.8 billion in AUM), SCHP (Schwab U.S. TIPS, Expense Ratio 0.07%, $1.4 billion in AUM), and STPZ (PIMCO 1-5 Year U.S. TIPS, Expense Ratio 0.20%, $1.06 billion in AUM) are also members of the $1 billion club in this space, as there is clearly ample institutional demand here to support several larger funds in the space competitively.

There are nine other alternatives in this ETF category, ranging from $771 million in AUM down to $15 million in AUM, and there is no reason to believe that the plug will be pulled anytime soon in these products as inflation is of course top of mind for many — not excluding our own Fed.

TIP shares fell $0.06 (-0.05%) to $115.83 in Monday afternoon trading. Year-to-date, TIP has gained 5.59%.


Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch
paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.

Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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