Glen Bradford is trashing the TIP ETF today on SeekingAlpha.com:
Frankly, anyone that thinks buying the iShares Barclays TIPS Bond Fund (AMEX: TIP) is going to protect you from inflation is a joker. If you want to protect yourself from inflation, you have to buy commodities. The problem with TIP is that the way they measure inflation is designed to understate true inflation.
The TIP ETF has had a great run over the last two years.
My opinion: This ETF isn’t useful as a long-term investment, but it can be used for short- to medium-term trades. If you think the TIPS base rate is going to keep falling, then this ETF makes sense. That’s a risky bet.
My preference is to hold TIPS to maturity — forming a secure basis for my overall portfolio.
Yes, the purchase limit is not affected by an I Bond redemption. It remains $10,000 per person per year.