TIPS funds are growing fast. Since the launch of the first fund in 2003, TIPS ETFs have grown into a $22 billion category, with several new launches announced this year. BlackRock’s iShares Barclays TIPS Bond Fund (NYSE Arca: TIP) accounts for the lion’s share of the market today with $20 billion in assets, but recent offerings from Pimco and Vanguard are gaining ground, and new funds continue to launch. But does any of this TIPS frenzy make sense?
In times of financial turmoil, investors often look for high-yield investments; certainly the recent wave of MLP exchange-traded products was spurred in part by growing demand for income-generating investments. High-yield corporate debt is another area that holds appeal for investors looking for yield, and though there has been no explosion of junk-bond ETPs in recent months, the asset class already represents a sizable portion of ETF assets under management—almost 10 percent of U.S. fixed-income ETF assets, according to the National Stock Exchange’s November data.
Five more hot ETF picks for 2011, from the emerging markets to high-yield debt.
VXX gathers a chunk of new assets on Monday, Dec. 27, in slow, snowbound trade.
State Street Global Advisors changed indexes on seven of its equity funds from Dow Jones to Standard & Poor’s this week, aligning its U.S. large-, mid- and small-cap funds so that they use benchmarks from the firm that provides indexes for its SPDR S&P 500 ETF (NYSEArca: SPY) and SPDR S&P MidCap 400 ETF (NYSEArca: MDY).
In addition to getting new names and indexes, the seven funds have also adopted new tickers that build on the “SPY” and “MDY” trading symbols. They are:
If yields are rising when the Fed is buying Treasury debt, what will happen when it stops?
Assets dipped to $999 billion on Monday, Dec. 20 amid equity outflows, from SPY, VTI.
SPY gathers $4.7 billion on Friday, Dec. 17, as total assets remain over $1 trillion.