New Short END TIPS from iShares (STIP)

Courtesy of Invest With An Edge

The iShares Barclays 0-5 Year TIPS Bond Fund (STIP) from Blackrock began trading last Friday (12/03/10).  The new ETF targets the short end of the TIPS curve by seeking to track the Barclays Capital U.S. Treasury Inflation-Protected Securities (TIPS) 0-5 Years Index (Series-L).

The STIP fact sheet (pdf) indicates 13 holdings and an effective duration of 1.38 years.  I expect the distribution yield to come in below 1% after subtracting the 0.20% expense ratio.  Additional information is in the overview, press release, and prospectus (pdf).

STIP faces competition from PIMCO 1-5 Year TIPS Index Fund (STPZ).  STPZ launched in August of 2009, has amassed $645 million in assets, and has the same 0.20% expense ratio.  The new iShares STIP claims to be the only ETF offering exposure to the very shortest end of the curve (zero to one year) as its 0-5 year range is broader than STPZ's 1-5 year range.

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

Visit Invest With An Edge