TIPS Outperform Treasurys In Q4 2019 And For All Of 2019

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About: PIMCO 1-5 Year U.S. TIPS Index ETF (STPZ), Includes: LTPZ, SCHP, TIP, TIPZ
by: Stephen Percoco, CFA
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Summary

TIPS earned 0.5% and straight Treasurys lost 1.4% in the 2019 fourth quarter.

TIPS yields declined 19 bp to 0.24% and straight Treasury yields increased 13 bp to 1.87%.

The inflation adjustment was 0.3% in the quarter and the breakeven spread increased 32 bp to 163 bp.

For all of 2019, TIPS had a total return of 9.1%, better than the 7.6% return on straight Treasurys.

After underperforming for two consecutive quarters, TIPS posted a small gain of 0.5% in the 2019 fourth quarter, significantly outperforming comparable maturity straight Treasurys, which posted a decline of 1.4%.

That performance mirrored the trend