Ishares TIPS Bond Fund ETF

[rkser]

I am looking for a ETF for money in our IRAs,

At present I have our money predominantly in CDs but I want to start a ETF to transfer some money as the CDs mature.

Expense Ratio is 0.19%, I know quite more than the 0.03% of BND.

It is a part of Couch Potato Portfolio, the philosophy of which suits us well now in retirement. 50% VTI + 50% Ishares TIPS BOND FUND ETF.

At present we are at 70/30, will be a problem getting to 50/50 & also what to do with VXUS Total International Stock ETF, lots of Cap Gains hidden in there.

Any thoughts ? Anyone on the Forum has this TIPS ETF or the couch potato Portfolio ??.

Thanks

 

[OldShooter]

... Expense Ratio is 0.19% ...

That's a lot of money for basically buying something requires no intelligence and then doing nothing. Why don't you just buy the TIPS themselves ?

 

[JackJester]

In addition to having to pay any expenses for something you can easily do yourself, as you note, the Expense Ratio for TIP is high compared to other funds. For example, SCHP is nearly identical to TIP (correlation of 97%), but the Expense Ratio is 0.05 vs 0.19 for TIP. For a $500K investment you would be throwing away $700 per year simply by using TIP vs SCHP. See the ETF comparison: https://portfolioslab.com/tools/stock-comparison/TIP/SCHP

 

[rkser]

In the fixed income side of the Portfolio i.e.. IRAs, how would one compare BND to either of the above two.

I know last few years were BAD for BND due to Fed Interest Rate shooting up, but it seems they are about done raising rates(I know nothing is for sure) the BND may start looking OK for a garden variety Bond Fund with a 0.03% expense ratio. It may fit the bill.

Thanks

 

[Sunset]

In the fixed income side of the Portfolio i.e.. IRAs, how would one compare BND to either of the above two.

I know last few years were BAD for BND due to Fed Interest Rate shooting up, but it seems they are about done raising rates(I know nothing is for sure) the BND may start looking OK for a garden variety Bond Fund with a 0.03% expense ratio. It may fit the bill.

Thanks

I don't get why you would want to take the risk, when you can at most brokerages buy Treasuries of various lengths at auction.
No risk of capital unless USA goes belly up, and earn ~ 4.5% to 5.3% for each, with spans of few months to decades.

 

[DrRoy]

At present we are at 70/30, will be a problem getting to 50/50 & also what to do with VXUS Total International Stock ETF, lots of Cap Gains hidden in there.

No way to avoid the taxes, although long term cap gains is at a lower rate. You could do it in pieces over several years.

I also buy individual bonds, not funds.

 

[mrfeh]

In the fixed income side of the Portfolio i.e.. IRAs, how would one compare BND to either of the above two.

I know last few years were BAD for BND due to Fed Interest Rate shooting up, but it seems they are about done raising rates(I know nothing is for sure) the BND may start looking OK for a garden variety Bond Fund with a 0.03% expense ratio. It may fit the bill.

Thanks

Unlike most others, I think a fund is perfectly fine. Just match your horizon for needing the money with duration of the fund.

If you're concerned about the ER, FIPDX does the same thing with an ER of .05%.