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Oct. 26, 2020, 10:49 a.m. EDT

TIPS ETFs outperform on reflation trade, BlackRock bet

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By Andrea Riquier

Exchange-traded funds linked to assets that protect against inflation rallied Monday as investors continued to bet on prices heating up after the presidential election, and one asset manager upgraded its views of the asset class. The iShares TIPS Bond ETF /zigman2/quotes/200600110/composite TIP -0.08% was up fractionally in the late morning, while the Schwab US TIPS ETF /zigman2/quotes/210453997/composite SCHP -0.05% and SPDR Portfolio TIPS ETF /zigman2/quotes/203715485/composite SPIP -0.13% were both up 0.1%. TIPS - Treasury Inflation Protected Securities - are bonds whose principal value changes as inflation rises. Inflation has remained tame, even tepid, ever since the 2008 financial crisis, but many analysts and investors believe that a Democratic victory in November will lead to more government spending, which will boost economic growth and drive up Treasury issuance. On Monday, BlackRock Inc. endorsed that view, saying "we downgrade U.S. Treasuries and upgrade their inflation-linked peers ahead of the U.S. election on a growing likelihood of significant fiscal expansion." Investors appear to believe that will impact longer-dated bonds: the PIMCO 15+ Year US TIPS Index ETF /zigman2/quotes/208968406/composite LTPZ -0.25% was up 0.5% Monday, while its short-dated peer /zigman2/quotes/207778548/composite STPZ +0.02% , along with the Vanguard Short-Term Inflation Protected Securities ETF /zigman2/quotes/208608895/composite VTIP +0.02% were both down 0.1%.

/zigman2/quotes/200600110/composite
US : U.S.: NYSE Arca
$ 125.72
-0.10 -0.08%
Volume: 1.33M
Nov. 23, 2020 8:00p
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/zigman2/quotes/210453997/composite
US : U.S.: NYSE Arca
$ 61.24
-0.03 -0.05%
Volume: 938,132
Nov. 23, 2020 8:00p
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/zigman2/quotes/203715485/composite
US : U.S.: NYSE Arca
$ 30.62
-0.04 -0.13%
Volume: 410,884
Nov. 23, 2020 8:00p
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/zigman2/quotes/208968406/composite
US : U.S.: NYSE Arca
$ 87.19
-0.22 -0.25%
Volume: 174,600
Nov. 23, 2020 8:00p
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/zigman2/quotes/207778548/composite
US : U.S.: NYSE Arca
$ 53.52
+0.01 +0.02%
Volume: 16,942
Nov. 23, 2020 8:00p
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/zigman2/quotes/208608895/composite
US : U.S.: Nasdaq
$ 50.80
+0.01 +0.02%
Volume: 826,946
Nov. 23, 2020 4:00p
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