Anyone hold Vanguard Short-Term Inflation-Protected Securities ETF (ticker: VTIP)? It looks like a great entry point for a slightly higher risk, higher return “cash” position.
VTIP’s 52-week low is 1.8% lower that it currently trades. Ex-dividend is Friday of this week. Quarterly yield is 1.6% (6.34%). Seems like the October low could be the cycle low. If true, and even if it hits that low you’ll essentially break even with one quarter of dividend payments (buy before Friday to get the next one).
Double bottomed at that low level in October and tried to retest the low again but bounced up before it could retest. Positive upward sign. Downside risk seems minimal and nice upside potential while you collect a nice 6% dividend (inflation adjusted).
Seems like a no brainer position right now. The yield is nice, capital appreciation dynamic is in your favor after getting crushed this year.
The highest real interest rates since 2009 combined with prospects for persistently high inflation for longer suggest TIPS returns of about 5-6% per year in the decade ahead.
I’m looking at this as a slightly higher return, higher risk cash position. Not expecting huge returns. Anyone have more info on VTIP?
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