OVERVIEW OF TREASURY INFLATION-INDEXED SECURITIES
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Potential Benefits of TIPS to Investors
Unique asset class (dollar-denominated, inflation-protected, full faith and credit of the United States ).
- Added portfolio diversification.
- Asset for investors focused on the future real purchasing power of their savings.
- Relatively low volatility and potentially attractive returns.
- Higher long-run correlation with inflation than real estate, commodities, or other real assets.
- Deflation floor, i.e., won't receive back less than nominal principal value at maturity.
The TIPS Market
- World’s largest inflation indexed securities market
- Over $450 billion of TIPS outstanding
- Daily turnover approaching nearly $10 billion.
TIPS as Part of Treasury's Funding Strategy
- Nearly 10% of our marketable debt portfolio
- Quarterly 10-year TIPS notes.
- Semi-annual 5- and 20-year TIPS issuance.
- Market particpants and individual investors can purchase TIPS in denominations as low as $100.
- In addition, investors can purchase Series I inflation-indexed savings bonds.
Contents
A complete description of the terms and conditions of TIPS can be found in the Treasury Uniform Offering Circular and the auction announcement for the applicable TIP on the Bureau of Public Debt's website.
Last Updated:
April 29, 2008
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