ETF Bond Type: TIPS
ETFs, or exchange traded funds, are a type of investment fund that trades on a stock exchange. TIPS ETFs are a specific type of ETF that invests in Treasury Inflation-Protected Securities, or TIPS. These securities are bonds issued by the US government that are designed to protect against inflation. The face value of the bonds increase with inflation, and the interest payments also increase. When inflation is low, the bonds provide stability and income. However, when inflation is high, the bonds can provide significant returns. For investors looking for exposure to TIPS, ETFs offer a convenient and cost-effective way to access this market.