Hot TIP for ETF Investors

Morgan Stanley (MWD Quote) has a few TIPS for exchange-traded fund investors.

The investment bank is out this week with a research note highlighting the pros and cons of the iShares Lehman TIPS Bond (TIP Quote) ETF, which tracks the well-known Treasury inflation protected securities, or TIPS. The report comes on the heels of rising worries about inflation.

TIPS are designed to protect investors from the erosion of purchasing power that rising inflation can cause. In an inflationary environment, TIPS tend to outperform most traditional fixed-income investments. TIPS pay a semiannual coupon, and their par value is adjusted to account for changes in the consumer price index. ...