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For investors seeking momentum, PIMCO 1-5 Year U.S. TIPS Index ETF (STPZ - Free Report) is probably on the radar. The fund just hit a 52-week high and has moved up 4.4% from its 52-week low of $51.04 per share.
Are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
STPZ in Focus
PIMCO 1-5 Year U.S. TIPS Index ETF offers exposure to the shorter maturity subset of TIPS, which has historically had less interest rate risk, a higher correlation to inflation and lower volatility than a broad U.S. TIPS index. It charges 20 bps in fees per year (see: all the Inflation-Protected Bond ETFs here).
Why the Move
The Treasury Inflation-Protected Securities (TIPS) corner of the bond market has been an area to watch lately, given the inflationary fears. Inflation picked up in January, fueled by higher grocery, gasoline and rent prices. The new administration’s tariff trade plans will likely boost inflation. In such a scenario, investing in TIPS ETFs, which offer shelter against rising inflation, would be prudent. These not only combat increasing prices but also protect income for the long term.
Image: Bigstock
TIPS ETF (STPZ) Hits New 52-Week High
For investors seeking momentum, PIMCO 1-5 Year U.S. TIPS Index ETF (STPZ - Free Report) is probably on the radar. The fund just hit a 52-week high and has moved up 4.4% from its 52-week low of $51.04 per share.
Are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
STPZ in Focus
PIMCO 1-5 Year U.S. TIPS Index ETF offers exposure to the shorter maturity subset of TIPS, which has historically had less interest rate risk, a higher correlation to inflation and lower volatility than a broad U.S. TIPS index. It charges 20 bps in fees per year (see: all the Inflation-Protected Bond ETFs here).
Why the Move
The Treasury Inflation-Protected Securities (TIPS) corner of the bond market has been an area to watch lately, given the inflationary fears. Inflation picked up in January, fueled by higher grocery, gasoline and rent prices. The new administration’s tariff trade plans will likely boost inflation. In such a scenario, investing in TIPS ETFs, which offer shelter against rising inflation, would be prudent. These not only combat increasing prices but also protect income for the long term.
More Gains Ahead?
STPZ has a weighted alpha of 4.03 and a 20-day volatility of 1.66%, which shows that there is still some promise for risk-aggressive investors who want to ride on this surging ETF.