Treasury Inflation Protected Securities (TIPS) Definition

Learn the definition of treasury inflation protected securities (TIPS) and other ETF terminology from the etf.com glossary.

ETF
|
Reviewed by: etf.com Staff
,
Edited by: etf.com Staff

Learn more about Treasury Inflation Protected Securities (TIPS)

Treasury Inflation Protected Securities (TIPS) act as a shield against inflation, offering investors a unique opportunity to preserve purchasing power. TIPS adjust their principal value in response to changes in the Consumer Price Index (CPI), ensuring that investors are protected from the erosive effects of inflation. TIPS ETFs provide a convenient avenue for investors to access this inflation-protected asset class, allowing for portfolio diversification and the incorporation of a risk-mitigating element. In a financial landscape where safeguarding against inflation is paramount, TIPS ETFs emerge as a strategic tool for prudent wealth preservation.

Related Terms

Exchange-Traded Fund

ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.