Inflation-Linked ETF-List of Inflation ETF: Trade Inflation through Inflation Exchange Traded Funds: Options, Futures, Derivatives & Commodity Trading

Inflation-Linked ETF-List of Inflation ETF: Trade Inflation through Inflation Exchange Traded Funds

This article contains list of Inflation linked Debt ETF - i.e. Inflation based Exchange Traded Funds. Also covered are the historical performance, benefits, advantages, disadvantages, opportunities and risks involved in trading Inflation ETF. Inflation ETF
The timing is right, the commodity prices have shot up the roof, the investors, as well as the common man, are worried about inflation. There could be no better time to launch a unique inflation related product called Inflation-Linked Global/Local Sovereign Debt ETF.

Inflation-Linked ETF-List: Review, Analysis & Details

iShares, which has been a pioneer in the Exchange Traded Funds market, has come ut with two unqie ETF products, aimed at beating inflation.

The two inflation related ETF from ishares are as follows:

1) iShares Global Inflation-Linked Bond Fund (GTIP)

2) iShares International Inflation-Linked Bond Fund (ITIP)

What is common between the IShares Global Inflation-Linked Bond Fund (GTIP) and iShares International Inflation-Linked Bond Fund (ITIP)?
Although it might sound a bit confusing because both the inflation linked ETF's have the words like Global and International linked to them.
However, both the funds have debt instruments from developed as well as emerging market countries.

Then what's the Difference between the GTIP and ITIP?
Interestingly, the Global Inflation-Linked Bond Fund (GTIP) also includes TIPS i.e. US Treasury Inflation-Protected Securities (TIPS), while iShares International Inflation-Linked Bond Fund (ITIP) invests only in foreign inflation-protected sovereign debt instruments.
So as an investor, if you are looking for inflation with overseas exposure, then ITIP is the fund for you, else you should go with GTIP.

What is the expense ratio for iShares Inflation ETF?
Both the GTIP and ITIP have a charge of 0.40% annually.

What are the other competitor products for iShares Inflation ETF?
There is currently only 1 competitor product which is inflation linked ETF and that is from SPRD - SPDR DB International Government Inflation-Protected Bond ETF (WIP): Here is the historical performance of WIP since 2008 (Graph courtesy of Google Finance) SPDR DB International Government Inflation-Protected Bond ETF
One more thing to note is that the above is competiting directly against iShares International Inflation-Linked Bond Fund (ITIP) and not GTIP.

Another competitor product may come from PIMCO, which are the leaders in the Fixed Income space, but their global inflation-linked fixed-income ETF is still in the registration phase, so till it comes out, you have only GTIP, ITIP and SPDR WIP in the inflation linked ETF space.

What are the current holdings/exposure for iShares Inflation ETF?
Currently, ITIP has maximum exposure to UK (around 10%) followed (in descending order) by Brazil (7%), Italy, France, Germany, Australia, Turkey, etc. So maximum exposure is on European countrie debt funds.
On the other hand, GTIP is primarily US, followed by UK, Frnace, Italy, etc.
However the above is true only at the time of writing this article. Holding patterns may change in future.

How about the maturity of the debt instruments for iShares Inflation ETF?
It appears that the majority of the debt instruments being held by these funds are in the 1 to 5 years and 5 to 10 years maturity period. And that makes sense also, since inflation is something which may not change drastically in a months time, but can show significant movements in a year's time. So it looks like maturity wise the distribution has been done appropriately
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