I really liked that quote from Frank Fabozzi in this Intelligent Investor column by the always-worth-reading Jason Zweig:
How Inflation-Protected Funds Get to Inflate Their Yields
By JASON ZWEIG
Among the 173 TIPS mutual funds tracked by Morningstar, the reported
"SEC yields" as of March 31 ranged from minus-0.77% to 5.58%, with 12
funds yielding at least 5%. Four of the seven exchange-traded funds that
specialize in TIPS displayed yields greater than 5%, with Pimco 15+ Year
U.S. TIPS Index leading the pack at 6.07%.
Yet no TIPS yield more than 1.75%. How could anyone but an alchemist
generate 5% or more out of 1.75% or less?
- posted 8 years ago