Inflation-indexed securities

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Inflation-indexed securities

Securities such as bonds or notes that guarantee a return higher than the rate of inflation if the security is held to maturity.

Inflation-Indexed Securities

A bond or other fixed-rate security with an interest rate that varies according to inflation. An inflation-indexed bond, for example, may pay a fixed coupon plus an additional coupon with the amount adjusted every so often according to some inflation indicator, such as the Consumer Price Index. If these securities are held to maturity, then the investor guarantees that the return will exceed the rate of inflation. Inflation-indexed securities exist to provide a low-risk investment vehicle in which the return is guaranteed not to fall below the rate of inflation. See also: I Bond.
References in periodicals archive ?
He's promised to include a look at how Treasury Inflation Indexed Securities (TIPS) fit into an investment strategy, along with a consideration of the place of alternative investments in a client's portfolio.
Break even inflation rates in the Treasury Inflation Indexed Securities (TIPS) market have moved up sharply and are now much closer to historical norms.
Initially called Treasury Inflation Protected Securities, their official name was later changed to Treasury Inflation Indexed Securities (TIIS).
Given the large yield differentials traditional instruments would have to offer to be competitive with inflation indexed securities we believe a decline in real yields on TIPS to be the more likely scenario.
Certain of the Funds have the ability to include allocations to international equities, real estate and inflation indexed securities (TIPS).
1) TIPS are officially called Treasury Inflation Indexed Securities (TIIS).