Personal Investments • 10 year TIPS ladder for yearly income

It does not match the example of #Cruncher
IBID website shows real yield .113

For the example, I use average yields calculated in cells G128:G137 of the "Weights" sheet of my TIPS Index Yield / Duration Excel workbook. Until today I hadn't compared them against the "Real Yield" reported by iShares on the web pages for its ten TIPS iBond ETFs. I'd assumed they were similar and that either source would work. Unfortunately, this isn't the case. The real yields reported by iShares are wrong. Here's a comparison of the two sources and their effect on calculating the amount of each fund to purchase:

Code:

Row     Col A      Col B     Col C   Col D   Col E     Col F   Col G Col H  2     Today    9/26/25  3  Amt / yr     10,000  4                         ------- Yield --------     ---- Investment ---     5    Ticker    Matures       WSJ iShares    Diff       WSJ iShares  Diff

Code:

  6      IBIC   10/15/26    1.000%  1.650%  0.650%     9,896   9,829   -67  7      IBID   10/15/27    0.889%  1.130%  0.241%     9,820   9,772   -48  8      IBIE   10/15/28    1.003%  1.150%  0.147%     9,700   9,657   -43  9      IBIF   10/15/29    1.121%  1.230%  0.109%     9,558   9,517   -42 10      IBIG   10/15/30    1.221%  1.300%  0.079%     9,405   9,368   -37 11      IBIH   10/15/31    1.323%  1.380%  0.057%     9,236   9,204   -31 12      IBII   10/15/32    1.457%  1.510%  0.053%     9,030   8,997   -33 13      IBIJ   10/15/33    1.586%  1.630%  0.044%     8,810   8,779   -31 14      IBIK   10/15/34    1.704%  1.740%  0.036%     8,582   8,554   -27 15      IBIL   10/15/35    1.793%  1.820%  0.027%     8,364   8,342   -22 16                Total                              92,402  92,021  -381

The difference is the greatest for IBIC, the 2026 fund. iShares shows 1.65% while I calculate 1.000% as the weighted average of the yields of the five TIPS maturing in 2026. Fortunately, the difference is less for later maturing funds where discounting by the real yield has the largest effect. Overall, using iShares reported yields would tell us that we need to purchase $381 less to meet the desired $10,000 per year proceeds.

I downloaded the .CSV file of IBIC's holdings. It includes the "Real YTM" of each of the five funds in column X. If I weight these by the "Market Value" in column D, I do get the 1.65% reported. The problem is that the "Real YTM" for each of the five TIPS is incorrect. Here is a comparison of what's in the download to the correct YTM as calculated with the Excel YIELD function using the "Price" in column K.

Code:

Row       Col A    Col B       Col C   Col D   Col E  Col F  Col G        Selected Formulas  2        Date  9/25/25  3                         Market    Pct of          -Real Yield-  4     Matures   Coupon     Value     Total   Price  Shown   Calc  5   1/15/2026   0.625%  12,966,125   22.3%   99.71   2.62  1.58%   G5: =YIELD(B$2,A5,B5,E5,100,2,1)  6   1/15/2026   2.000%   6,311,471   10.8%  100.10   2.72  1.66%        | | |  7   4/15/2026   0.125%  10,742,604   18.5%   99.44   1.72  1.14%        | | |  8   7/15/2026   0.125%  13,191,263   22.7%   99.66   0.94  0.55%        v v v  9  10/15/2026   0.125%  14,962,139   25.7%   99.46   0.94  0.64%   G9: =YIELD(B$2,A9,B9,E9,100,2,1) 10 Sum/Wtd Avg           58,173,601  100.0%           1.65  1.03%  F10: =SUMPRODUCT($D5:$D9,F5:F9)

Note that the weighted average of the correct yields in column G comes to 1.03%, close to the 1.000% I obtained based on WSJ Quotes as averaged on the "Weights" sheet of TIPS Index Yield / Duration Excel workbook. I don't know what iShares is doing wrong. But clearly, it isn't calculating real yields correctly.

Statistics: Posted by yankees60 — Tue Oct 28, 2025 9:31 pm — Replies 41 — Views 3408