Guide · TIPS
Best TIPS ETFs
A TIPS fund holds US Treasury bonds whose face value is reset each period to keep pace with CPI. The yield quoted on a TIPS is a real yield — what you earn after inflation — so the fund delivers a known real return regardless of where inflation lands. The catch is taxes: the inflation accretion is taxed each year as ordinary income even though you don't receive it in cash until the bond matures. This makes TIPS one of the most tax-inefficient assets to hold in a taxable account.
How the scoring ranks these funds
All four catalog funds carry near-identical 3 bp expense ratios on the broad maturity buckets, and TIP's 18 bps fee shows clearly in the score gap. Duration is the more important distinction between them: SCHP and TIP track the full TIPS maturity spectrum (~7-year duration); VTIP and STIP target only short-dated TIPS (~2-3 year duration), which trade more like cash with an inflation rider.
See the methodology for the full formula behind each sub-score.
Top picks
-
85
composite / 100
Schwab's broad-market TIPS fund. 3 bp expense and the highest score in the category. Tracks the Bloomberg US Treasury Inflation-Linked Bond Index — full maturity spectrum, intermediate duration. The default broad-TIPS choice for tax-advantaged accounts.
- Expense
- 0.030%
- AUM
- $15.46B
- Issuer
- Schwab
- Detail
- SCHP page →
-
86
composite / 100
Vanguard's 0–5 year TIPS fund. Same 3 bps as SCHP but at a much shorter duration — behaves more like a cash-equivalent with inflation protection than a true intermediate bond. Useful as a CPI-linked alternative to a Treasury-bill fund in retirement bucketing.
- Expense
- 0.030%
- AUM
- $68.48B
- Issuer
- Vanguard
- Detail
- VTIP page →
-
86
composite / 100
iShares 0–5 year TIPS fund. Functionally interchangeable with VTIP — same 3 bps, same maturity range, slightly different index but near-identical exposure. Works as a tax-loss-harvesting partner to VTIP.
- Expense
- 0.030%
- AUM
- $14.99B
- Issuer
- iShares
- Detail
- STIP page →
-
79
composite / 100
iShares' original broad-market TIPS fund. 18 bps — six times the cost of SCHP for the same exposure. The legacy fund predates the cost compression in the category; new positions go to SCHP by default.
- Expense
- 0.18%
- AUM
- $14.75B
- Issuer
- iShares
- Detail
- TIP page →
Also in the category
Other funds scoring in this category. Same data, no editorial commentary yet.
Account placement matters more for TIPS than for almost anything else
The annual taxation of inflation accretion (sometimes called "phantom income") is what drives our 20 base score on the tax-efficiency sub-score for this category. In a Traditional IRA, 401(k), or Roth, the accretion compounds tax-free until withdrawal — which is when most TIPS literature implicitly assumes the fund will be held. Holding TIPS in a taxable account is functional but materially less efficient than holding them in a tax-advantaged one; the difference compounds.
TIPS funds vs individual TIPS
A common Bogleheads question is whether to hold TIPS through a fund or directly via TreasuryDirect / a brokered TIPS ladder. The fund is operationally simpler but has no maturity date — you're exposed to interest-rate risk indefinitely. A bond ladder locks in real return per rung at the cost of more accounting. For a typical accumulation-phase investor, a fund is the right starting tool.
Common questions
- Are TIPS a good inflation hedge?
- Yes, for unexpected inflation specifically. TIPS guarantee a real return regardless of CPI; nominal Treasuries do not. They are not a hedge against high real interest rates, however — when real yields rise, TIPS prices fall too. The 2022 drawdown was a TIPS-fund-specific shock driven by real-yield repricing, not a failure of the inflation linkage.
- Should I hold short or intermediate TIPS?
- Short-duration TIPS (VTIP, STIP) carry less interest-rate risk and behave more like cash-with-CPI-protection. Intermediate-duration TIPS (SCHP, TIP) carry more interest-rate risk but more closely match the duration of inflation-linked liabilities (e.g. living expenses 5–15 years out). Most allocations split or default to intermediate.
Guide. Picks come from the live PlainIndex composite for this category; editorial commentary on each pick is hand-written. Re-pulled with every catalog refresh.
PlainIndex publishes data and editorial commentary — nothing here is personalized investment advice. Read the methodology for how the scores referenced here are computed.