TIP vs. VGSH - ETF Comparison
TIP - iShares TIPS Bond ETF
The iShares TIPS Bond ETF is an inflation-protected bond fund that tracks the ICE US Treasury Inflation Linked Bond Index, providing broad-based exposure to US government-issued TIPS. The fund offers a low-risk investment option for investors seeking to protect their assets against inflation, with a competitive expense ratio and high liquidity. While it may not be a surefire defense against inflation, it can be used as a tactical play or a core holding in a long-term portfolio.
VGSH - Vanguard Short-Term Treasury ETF
The Vanguard Short-Term Treasury ETF (VGSH) is a fixed income fund that tracks the Bloomberg US Treasury (1-3 Y) index, providing exposure to short-term government bonds with maturities between one to three years. With a low interest rate exposure, this ETF offers a safe haven appeal, minimizing credit risk and interest rate risk. It can be used to tilt exposure towards Treasury bonds, decreasing the effective duration of a portfolio and minimizing overall volatility.
| TIP | VGSH | |
|---|---|---|
| Fund Name | iShares TIPS Bond ETF | Vanguard Short-Term Treasury ETF |
| Fund Provider | BlackRock | Vanguard |
| Index | ICE US Treasury Inflation Linked Bond Index - Benchmark TR Gross | Bloomberg US Treasury (1-3 Y) (Inception 4/30/1996) |
| Asset Class | Bonds | Bonds |
| Listing | US-listed | US-listed |
| Expense Ratio | 0.19% | 0.04% |
| Inception Date | 2003-12-04 | 2009-11-19 |
| Number Of Holdings | 50 | 97 |
| Currency | USD | USD |
| Region | United States | United States |
| Bond Type | Government Bonds | Government Bonds |
| Leveraged | Non-leveraged | Non-leveraged |
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Key Metrics
Performance Metrics
Risk Metrics
Detailed Returns
Benchmark Comparison
Key Metrics
Performance Metrics
Risk Metrics
Detailed Returns
Benchmark Comparison
Performance Analysis
The performance analysis examines historical data to assess the returns of the investment strategy, including key metrics such as Cumulative returns, End of Year (EoY) returns, and risk-adjusted returns like the Sharpe ratio or the Sortino ratio.
Cumulative Returns
End of Year Returns Table
End of Year Returns
Risk Analysis
The risk analysis refers to an assessment of potential negative events that could lead to a loss of capital. Conducting a risk analysis can help in deciding whether an investment should be made. This is done using risk metrics such as drawdowns, volatility and beta which reflect stakeholders' confidence in the consistency of an investment strategy.
Drawdowns
Drawdowns Table
Monte Carlo Simulation
The Monte Carlo simulation is a statistical method used to forecast portfolio returns by generating a wide range of potential outcomes through random sampling from historical asset price data. It helps investors assess the potential risk and return of a portfolio under various market conditions. The simulation takes into account the initial investment and optionally simulates cash flow scenarios like fixed contributions, fixed withdrawals, or percentage withdrawals.
IMPORTANT: The forecast generated through Monte Carlo simulations is purely hypothetical and does not guarantee future returns. Investment decisions should be made with consideration of various factors, and past performance is not indicative of future results.