The Inflation-Linked Bond strategy seeks a long-term total rate of return that outpaces inflation by investing primarily in U.S. government inflation-linked securities.
The Inflation-Linked Bond investment strategy builds on TIAA’s deep knowledge of Treasury Inflation-Protected Securities (TIPS) to construct portfolios designed to provide a hedge against inflation. In 1995, TIAA provided pricing analysis and, with the United States Treasury, sponsored a conference on the prospects for U.S. inflation-linked securities. This experience in research and analysis gives the organization a unique perspective in managing inflation-protected securities.
The investment team believes that U.S. domiciled investors should seek pure exposure to U.S. inflation-linked securities to create an effective inflation hedge. The inflation-linked bond strategy invests primarily in U.S. government inflation-linked securities and generally maintains an average duration similar to its benchmark, the Lehman Brothers U.S. TIPS Index. Although inflation can erode the value of investments under all possible economic scenarios, TIPS are most likely to outperform nominal Treasuries during times of moderate growth and rising inflation.
Inflation-Linked Bond portfolios are subject to certain risks such as market and investment style risk. Fixed-income investments are subject to certain risks such as interest rate, inflation, and credit risks. Investments in inflation-linked securities can be affected by changes in investors’ inflation expectations or changes in real interest rates.
This material is provided for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate.