The Federal Reserve is engaged in a well-documented battle with high inflation. So, many advisors and fixed income investors are evaluating Treasury inflation-protected securities (TIPS) and related ETFs.
Many investors are turning to inflation-linked bonds amid concerns over rising prices. TIPS are offering high yields, but investors need to keep an eye on total returns.
In theory, the last several years should've been an ideal time to own Treasury Inflation Protection Securities (TIPS) and the related ETFs. However, the largest ETF in the category has gained just 4% since June 2025.
Inflation has remained above the Federals reserve's 2% target for 65 consecutive months, while real yields on long duration Treasury Inflation Protected Securities have climbed to their highest level since the securities were introduced 16 years ago. That combination has created a rate environment in which long-term TIPS offer historically high inflation-adjusted income as well as the potential for sizable price gains if real yields revert toward long-term averages.
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A 60-year-old with $5 million in retirement assets peels off $1 million for 30-year Treasury Inflation-Protected Securities and lets the remaining $4 million chase growth.
Inflation has not cooled. CPI reached 330.293 in March 2026, climbing from 320.302 a year earlier, and Core PCE, the Fed's preferred gauge, sits in the 90.9th percentile of its 12-month range.
Now and then, advisors need to get a sense of how Americans of all ages approach retirement planning. Back in March, Fidelity Investments released its 2026 State of Retirement Planning Study.
At this point, investors of all ages are well aware just how much inflation can cut into one's spending power, whether it be for everyday expenses or big-time purchases. Key Takeaways: Inflation affects investors of all kinds, but retirees feel the impact more than others because many rely on fixed-income strategies to cover everyday expenses.
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