STPZ vs VTIP

STPZCPIMCO 1-5 Year U.S. TIPS Index Exchange-Traded Fund

VTIPAVanguard Short-Term Inflation-Protected Securities ETF

In short

STPZ Inflation protection on a short leash. STPZ indexes only TIPS maturing in one to five years, pairing CPI-linked principal with less rate sensitivity than long-dated linkers. It has worked this niche since 2009, at a fee above the category norm.

VTIP Inflation protection without the long-bond whiplash. VTIP holds only Treasury TIPS maturing inside five years, so CPI does most of the driving and rate swings do less of it, for three basis points a year.

Stated mandate

STPZ The Fund seeks total return that closely tracks its specified U.S. inflation-linked Treasury index before fees and expenses. It uses indexing and representative sampling rather than trying to outperform the index.

VTIP Tracks a benchmark measuring the investment return of U.S. Treasury inflation-protected public obligations with remaining maturities under five years.

Why people hold it

• STPZ The benchmark holds Treasury inflation-linked bonds maturing in one to five years: you get the CPI adjustment to principal without the price swings of 20-year linkers.yahoo.com
• Straight indexing. PIMCO uses representative sampling to track the benchmark rather than trying to beat it, so the name on the tin is what you own.pimco.com
• Live since 2009 and moderately traded, so ordinary retail-size orders in a niche corner of the Treasury market usually don't have to hunt for a counterparty.

• VTIP Three basis points a year, against a 0.12% median for Treasury bond ETFs in its group. Vanguard's at-cost setup shows up right in the fee line.vanguard.com
• TIPS principal ratchets with CPI, and the under-five-year maturity cap keeps duration short, so rate moves land lighter here than in full-curve TIPS funds like SCHP.vanguard.com
• Open since 2012 and now a multi-billion-dollar, actively traded fund that owns Treasury paper directly. Plain index rules, no swaps, no credit detours.

Worth knowing

• STPZ Cost is the trade-off: 0.20% a year, above the 0.12% typical of Treasury bond ETFs, while index peers such as SCHP and VGIT charge 0.03%.
• Distributions are irregular. TIPS income moves with inflation accruals, so payouts arrive unevenly rather than as a level check.
• Narrow by design: roughly two dozen short-dated government bonds. No corporate credit, no long end, so it behaves nothing like a core bond holding.

• VTIP Short maturities cut both ways: less sensitivity to rates, and less exposure to shifts in long-run inflation expectations than a full-maturity TIPS fund such as SCHP.
• Income rides on CPI accruals, so the quarterly payout moves around rather than arriving as a steady coupon.
• This is one narrow slice of one market, short US Treasury TIPS, not a diversified bond portfolio.

Full STPZ profile⁠

Full VTIP profile⁠