STIP vs TDTF

STIPAiShares 0-5 Year TIPS Bond ETF

TDTFBNorthern Trust iBoxx 5-Year Target Duration TIPS ETF

In short

STIP The short-fuse inflation hedge. STIP holds only inflation-linked Treasuries maturing inside five years, keeping the inflation link while sidestepping most of the long-bond rate swings. Three basis points a year.

TDTF Most TIPS funds let their interest-rate sensitivity drift as bonds age. TDTF pins it: a monthly-rebalanced index built to hold modified adjusted duration near five years, for 0.18% net of a waiver through March 1, 2027.

Stated mandate

STIP The fund seeks to track an index of U.S. Treasury inflation-protected securities with maturities under five years, offering inflation hedging while managing duration risk.

TDTF The Fund seeks to track the price and yield performance of the iBoxx 5-Year Target Duration TIPS Index before fees and expenses.

Why people hold it

• STIP Three basis points a year, roughly a quarter of the typical fee in its Treasury ETF group. On cost, this is near the floor for bond funds.
• Maturities capped under five years by design, so the inflation adjustment stays and the long-duration price swings largely do not.
• Running since 2010, a multi-billion-dollar fund that trades actively. Plain index construction, US Treasuries only.
• Sits in the upper half of the Treasury bond ETFs we cover, one of the stronger short-maturity builds in that group.

• TDTF The index targets a modified adjusted duration of roughly five years and rebalances monthly, drawing from TIPS maturing in three to twenty years.sec.gov
• Hugging the index is the entire job here, and on that measure it has been one of the stronger implementations in the TIPS group.
• Listed in 2011 under Northern Trust's FlexShares brand, it is a multi-billion-dollar fund with moderate trading volume.
• The holdings are plain US Treasury TIPS, whose principal and interest payments are tied to an official inflation measure.sec.gov

Worth knowing

• STIP Short bonds accrue less inflation compensation than long-dated TIPS, and prices still move with real yields. This is a dampened hedge, not a pure one.
• Distributions are irregular. Payouts ride the inflation adjustment, so income arrives lumpy rather than as a steady check.
• Around 25 bonds, all at the front of the curve. SCHP spans the full TIPS maturity range for the same 0.03%.

• TDTF 0.18% net of a waiver through March 1, 2027 sits above the category median; broad peers SCHP and VTIP charge 0.03%, but let duration drift with their maturity buckets.
• Payments move with inflation accruals, so cash arrives on an irregular schedule rather than a steady monthly rhythm.sec.gov
• Targeting duration holds the dose of interest-rate risk steady, it does not remove it. Real-yield swings still show up in the price.sec.gov

Full STIP profile⁠

Full TDTF profile⁠