STIP vs TIP

STIPAiShares 0-5 Year TIPS Bond ETF

TIPBiShares TIPS Bond 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.

TIP The 2003-vintage TIPS fund: roughly 50 inflation-linked Treasuries, tracked tightly and traded heavily. You pay up for that depth, because cheaper TIPS wrappers now exist.

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.

TIP The fund seeks to track an index of inflation-protected U.S. Treasury bonds, providing fixed-income exposure and a potential hedge against inflation.

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.

• TIP Owns the inflation-linked Treasury market straight: about 50 TIPS, where the hedge is built into the bonds themselves rather than layered on with derivatives.ishares.com
• A multi-billion-dollar fund that trades actively and stays very close to its benchmark, the ICE U.S. Treasury Inflation Linked Bond Index.
• Trading since 2003, one of the longest-tenured inflation-linked bond funds on the market, with a large iShares fixed-income operation behind it.

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%.

• TIP At 0.18% a year it runs above the median Treasury fund in its group, and SCHP covers similar TIPS ground for 0.03%.
• Inflation protection is not price protection. The index spans the full TIPS curve, including long maturities, so rising real yields drag on the share price.ishares.com
• Payouts arrive on an irregular schedule and move with inflation accruals, so income here behaves less like a steady coupon than a nominal bond fund's.

Full STIP profile⁠

Full TIP profile⁠