STIP vs TDTT

STIPAiShares 0-5 Year TIPS Bond ETF

TDTTBNorthern Trust iBoxx 3-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.

TDTT TIPS duration wanders as inflation expectations shift. TDTT's index pins it, targeting a modified adjusted duration of 3.0 years and rebalancing monthly: inflation-linked Treasuries on a short leash.

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.

TDTT The Fund seeks to track, before fees and expenses, the price and yield performance of the iBoxx 3-Year Target Duration TIPS Index. It uses a passive indexing approach, generally replicating the index or using representative sampling when full replication is impracticable.

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.

• TDTT The index targets a modified adjusted duration of 3.0 years, resets when it strays past a 5% band, and rebalances monthly. Duration is the design, not a byproduct.flexshares.comflexshares.com 2
• Built from TIPS with one to ten years to maturity and at least $2 billion outstanding, so the sleeve leans on the biggest, most tradable issues.flexshares.comflexshares.com 2
• Listed in 2011 and now a multibillion-dollar fund from Northern Trust, long past the stage where a niche bond ETF is fighting for scale.

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%.

• TDTT 0.18% net of a waiver through March 1, 2027 (0.19% gross), above the category median. Plain market-cap TIPS funds like SCHP and VTIP charge 0.03%.
• Pinning duration near three years is a middle setting: it moves less with rates than long TIPS, more than cash-like short TIPS.flexshares.com
• TIPS coupons move with CPI adjustments, so payouts land on an irregular schedule and vary in size rather than arriving as a steady check.flexshares.com

Full STIP profile⁠

Full TDTT profile⁠