Inflation Is Back on Investors' Radar as Funds Flow to TIPS ETF

Investors are seeking protection against a pickup in price pressures.

The iShares TIPS Bond ETF drew $158.7 million in investment flows Monday, tops among U.S. fixed-income products and its biggest intake since January. The exchange-trade fund, best known by its ticker TIP, holds U.S. government bonds whose principal and interest payments are adjusted for inflation.

Investors flooded into the product in the immediate aftermath of the U.S. election, placing bets that the new administration would stoke inflation by enacting pro-growth fiscal policies. Amid a lack of progress on the legislative front, inflows had largely petered out.

U.S. inflation readings have underwhelmed this year despite continued strengthen in the domestic labor market and an increasingly synchronized global expansion.

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