Yep, that would be a good usage for it as well. So LTPZ/SCHP, then SCHP/STIP and finally STIP/ICPI, for example.Around here, at least, there has been a growing interest in things like TIPS ladders, and then an associated interest in simulated ladders using multiple TIPS ETFs. I suspect that increased interest is not just limited to this audience.
If you do the latter (a simulated ladder), you historically ran into a problem that the shortest cheap TIPS ETFs were 0-5 funds, and so something even shorter could improve tracking. Substituting a nominal ultrashort fund or cash equivalent sorta worked, but still left a little bit of tracking error possibility, as another poster just indicated in fact. That may help explain why RBIL and now ICPI were recently launched.
I note DFA does an approach like this in its Target funds, and they use their One-Year Fixed Income Portfolio, DFIHX, an actively managed fund, for the shortest fund. According to Yahoo, its returns look like:
DFIHX
1 y: 4.47%
3 y: 4.83%
5 y: 2.43%
10 Y: 1.87%
Again not necessarily a huge thing in the greater scheme, but I don't particularly mind how ICPI would apparently have compared.
I'm looking at it for a slightly different reason. Today all of our TIPS ladders have only one CUSIP maturing each year. That means that the proceeds that we use for spending over the course of the year is subject to short term inflation spikes - like what happened in 2021/2022. I've been using an ultrashort nominal bond fund for that purpose. Backtesting with it shows that in 2021/2022 I would have lost a bit of spending power over the course of each of the two years with my current approach. This fund gives us another option for that purpose and which I'm currently contemplating.
Cheers.
Statistics: Posted by dcabler — Tue Dec 30, 2025 8:00 am — Replies 17 — Views 2665