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iShares 0-5 Year TIPS Bond ETF (STIP)

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STIP offers exposure to inflation-protected bonds that are primarily at the short end of the maturity spectrum. Interest rates have been hiked multiple times since December 2015. If there is a steep rise in short-term rates, it would affect the bond’s performance. Moreover, owing to the low duration of the bond, the yield is low. However, short-term bonds are less sensitive to changes in interest rates. Adding to the agony, uncertainty around oil inventories and trade war fears might keep inflation in check. Moreover, the unwinding of Fed’s $4.5 trillion balance sheet might be a drag on this fund. However, the fund has low credit risk. primarily because of its investment-grade focus.

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