TIPS Fund in 401K or Rollover and Create Ladder

[samclem]

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Originally Posted by OldShooter Quote: Originally Posted by samclem I've been thinking that a target maturity TIPS ETF might be an interesting product. . . . Well, I suppose if there were a market for these things, someone would already be selling them. Wall Street is >not< short of creativity when it comes to inventing new products. I don't think such a product makes any sense. I can buy a bunch of TIPS in my choice of maturity with a single phone call to the Schwab bond desk. 5 minutes tops. Same availability with Vanguard and Fido, I expect, and probably others. I can also buy on the auction if I want. I don't know why anyone would ever screw with TreasuryDirect.

Well, I think you answered my question. But folks buy a lot of T-bill and T-bond ETFs and MFs, so there must be some reason (and it's not due to better performance compared to the underlying bonds). Maybe it is just the "packaging" as MFs and ETFs that is more familiar/accessible to many individual investors who might never have dabbled in buying individual bonds.

[daylatedollarshort]

Quote:

Originally Posted by OldShooter I don't think such a product makes any sense. I can buy a bunch of TIPS in my choice of maturity with a single phone call to the Schwab bond desk. 5 minutes tops. Same availability with Vanguard and Fido, I expect, and probably others. I can also buy on the auction if I want. I don't know why anyone would ever screw with TreasuryDirect.

Fidelity doesn't charge anything to buy TIPS at auction, so as long as they have that policy we'll go through them. Every time an auction comes up we look at the expected rate, our available cash and decide how much if any to buy and from there it probably takes under a minute to place an online order.

[OldShooter]

Quote:

Originally Posted by samclem ... Maybe it is just the "packaging" as MFs and ETFs that is more familiar/accessible to many individual investors who might never have dabbled in buying individual bonds.

That's my conclusion. I have no idea why people are afraid to buy individual bonds, especially govvies. There is no reason to pay a manager fee for what is basically a clerical job. A monkey could be trained to select govvies. Maybe that's how the funds do it? Pay in bananas and pocket the fees.