This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Vanguard Inflation ETFs to Challenge TIPS

Stocks in this article: VIPSX TIP GLD IAU

A proposed regulatory exemption could allow Vanguard's Inflation-Protected Securities Fund (VIPSX) to issue a class of ETF shares. The new fund would represent Vanguard's first actively managed ETF, as well as competition for the highly popular iShares TIPS ETF (TIP).

While economic data has yet to prove that inflation should be a major concern for investors, net flows into inflation-protection funds suggest that the fear is real. Assets in VIPSX have ballooned from $17 billion at the end of 2008 to $27.5 billion today. Assets in TIP have increased from $7.6 billion in October of 2008 to $17.2 billion at the end of October 2009, according to recent data from the National Stock Exchange. (See the October ETF Scorecard).

Assets in SPDR Gold Shares (GLD), used by many investors to hedge against the threat of inflation, grew from $17.6 billion in October 2008 to $36.9 billion at the end of October 2009. (Read How to Invest in Gold ETFs)

While gold ETF funds and TIPS ETFs from iShares and Pimco (See Pimco TIPS the Competition) have captivated the attention of investors worried about inflation, the new ETF from Vanguard could provide some serious competition.

ETF shares of VIPSX were first proposed in 2007, but later rejected when Vanguard proposed to reveal only a portion of the funds' holdings. Now, promises of full transparency could help to push these ETF shares through the regulatory hoops.

Like TIP and the existing Vanguard Inflation-Protection mutual fund, the new ETF shares would invest primarily in Treasury Inflation-Protected Securities. VIPSX, as well as the proposed ETF, would track the Barclays Capital U.S. Treasury Inflation Protected Securities Index. This fund will differ from passively managed ETFs, however, in that the average maturity and mix of bonds may differ from those in the underlying index.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,054.67 +0.96 0.01%
S&P 500 2,091.47 +2.70 0.13%
NASDAQ 4,805.14 -1.7190 -0.04%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs