Real Yield on TIP?

[youbet]

Can anyone tell me how/where to look up the real yield on the TIP etf?

 

[brewer12345]

Dunno about the fund, but you can see current bond real rates here: Bloomberg.com: Government Bonds Would be very surpised if TIP were far off the 5 or 10 year bond rates. Check the sponsor's website.

 

[Stevewc]

Hello youbet,
This doesn't answer your question directly but this site is one of the best I know of on TIPS. He (site owner) is working on new information and adding to the site currently. I think you'll find the answer and more here: Individual TIPS Or TIPS Mutual Fund - The Finance Buff
Hope this helps,
Steve

 

[thefinancebuff]

Can anyone tell me how/where to look up the real yield on the TIP etf?

On iShares web site?

iShares Barclays TIPS Bond Fund (TIP): Overview

 

[haha]

Hello youbet,
This doesn't answer your question directly but this site is one of the best I know of on TIPS. He (site owner) is working on new information and adding to the site currently. I think you'll find the answer and more here: Individual TIPS Or TIPS Mutual Fund - The Finance Buff
Hope this helps,
Steve

This site is full of thought provoking content. Thanks for posting it!

Ha

 

[youbet]

On iShares web site?

iShares Barclays TIPS Bond Fund (TIP): Overview

Thanks everybody! Good info. The above site does directly give the real yield. As of 12/30/08, it's 2.68%. Also lots of other good data such as duration, average maturity, etc. Interesting to comare to the Vanguard inflation protected fund.

 

[Stevewc]

Happy to help Ha !!!
Looks like the buff himself post here too.
He and his site are a great source of information.
Later,
Steve

 

[youbet]

I've been busy reading much of the excellent info suggested here. The objective is trying to understand as best I can the pros and cons of inflation protected MF's, etf's and TIP bonds themselves. And also at what levels they seem to be an attractive purchase......

I've put in an order to buy a small amount of 10 yr TIP bonds in my IRA acct at Schwab at the Jan 6 auction. No commission, so the small quantity is feasible. After reading, it's time for a little learning by doing! I'll report back on how it turns out......

Still struggling with understanding TIP bonds in the secondary market......

 

[thefinancebuff]

Happy to help Ha !!!
Looks like the buff himself post here too.
He and his site are a great source of information.
Later,
Steve

Thank you Steve. I joined recently after hearing about this board. I have been hanging out in the FIRE and Money forum so far.

 

[haha]

Thank you Steve. I joined recently after hearing about this board. I have been hanging out in the FIRE and Money forum so far.

Buff, I spent a lot of time going through your site after Steve mentioned it. All very good, very clear, and very free from ego poisoning. Great job. I hope you will enjoy it here also.

Ha

 

[samclem]

Buff,
I'll add my thanks for your excellent site--I dropped in for a visit a few weeks ago and learned a lot about TIPS and deflation. I hope you enjoy it here, I know you've got a lot to contribute.

 

[youbet]

OK...... Today's Treasury auction resulted in ten year TIP bonds with a real yield of 2.245%. I was expecting higher. My crystal ball seems to be a little cloudy......

Anyone know of a source of info where "experts" predict the yields that will result from Treasury auctions or forums where this is discussed? Any other way to help make a prediction?

 

[ziggy29]

OK...... Today's Treasury auction resulted in ten year TIP bonds with a real yield of 2.245%. I was expecting higher. My crystal ball seems to be a little cloudy......

More demand for newer issues that haven't had any inflation adjustments to lose. And the ones with NO inflation adjustment to lose will be priced the yield the least.

 

[FIRE'd@51]

More demand for newer issues that haven't had any inflation adjustments to lose. And the ones with NO inflation adjustment to lose will be priced the yield the least.

We talked about this on another thread. When you buy a TIP, you are buying a pure inflation-adjusted security AND a European put struck at 100. As Ziggy says, at auction this put is at-the-money (Index Ratio=1.00000). Since part of the purchase price goes to pay for the put, less is available to pay for the inflation-adjusted payment stream, hence the lower YTM.

BTW, since the January table of inflation-adjustments is available, the Index Ratio for this TIP will decrease by 1% between the issue date (Jan 15) and the end of the month.

 

[youbet]

We talked about this on another thread. When you buy a TIP, you are buying a pure inflation-adjusted security AND a European put struck at 100. As Ziggy says, at auction this put is at-the-money (Index Ratio=1.00000). Since part of the purchase price goes to pay for the put, less is available to pay for the inflation-adjusted payment stream, hence the lower YTM.

BTW, since the January table of inflation-adjustments is available, the Index Ratio for this TIP will decrease by 1% between the issue date (Jan 15) and the end of the month.

OK... I found the other thread. Thanks.

 

[FIRE'd@51]

OK... I found the other thread. Thanks.

Sorry, I should have linked the thread to which I was referring. Here it is, if anyone else wants to look at it:

TIPS Yields

BTW, looks like you've made a nice profit on those TIPS already.

 

[brewer12345]

We talked about this on another thread. When you buy a TIP, you are buying a pure inflation-adjusted security AND a European put struck at 100. As Ziggy says, at auction this put is at-the-money (Index Ratio=1.00000). Since part of the purchase price goes to pay for the put, less is available to pay for the inflation-adjusted payment stream, hence the lower YTM.

Ahh, that explains why I saw TIPS in the secondary market yielding about 3.5%. These were originally 10 year bonds that have about 5 years to go.