TIP vs VTIP: Broad TIPS vs Short-Term TIPS — Duration Matters
Both TIP and VTIP protect against inflation using Treasury Inflation-Protected Securities. TIP has longer duration and higher interest rate sensitivity. VTIP is shorter and cheaper.
TIP (iShares TIPS Bond ETF) and VTIP (Vanguard Short-Term Inflation-Protected Securities ETF) both invest in US Treasury Inflation-Protected Securities — bonds whose principal adjusts with the CPI. But they target very different maturity ranges. TIP holds TIPS across all maturities (effective duration ~7 years) at 0.19%, giving it higher interest rate sensitivity. VTIP specifically holds short-term TIPS with maturities under 5 years (effective duration ~2.5 years) at a much lower 0.04%. For most investors using TIPS as inflation protection, VTIP's shorter duration means less sensitivity to rate changes — making it a more predictable inflation hedge. TIP is appropriate if you want the full TIPS market at a higher fee and accept more rate risk.
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
Both funds trade commission-free at every major brokerage. Where to buy them →
📋 TIP vs VTIP: Key Facts Side by Side
| Metric | TIP | VTIP |
|---|---|---|
| Fund Name | iShares TIPS Bond ETF | Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares |
| Issuer | iShares | Vanguard |
| Tracks Index | Bloomberg US TIPS | Bloomberg US Treasury Inflation-Protected Securities 0-5 Year |
| Expense Ratio | 0.19% | 0.04% ✓ |
| Cost per $10K/yr | $19.00 | $4.00 |
| AUM | $14.2B | $73.0B |
| Holdings | 50 | 25 |
| Inception | 2003 | 2012 |
| 1-Year Return | -6.34% | -3.19% |
| 3-Year Return | +3.70% | +4.75% |
| 5-Year Return | -0.28% | +2.88% |
| Dividend Yield | 4.71% | 4.19% |
| Holdings Overlap | See holdings overlap → | |
| Avg Bid-Ask Spread | 0.01% | 0.01% |
AUM and returns updated Oct 15, 2026 from ETF BFF database; expense ratios verified against issuer filings. Returns are annualised. Not investment advice.
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📊 TIP vs VTIP: Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Which Fund Fits Which Investor?
- want broader diversification (50 holdings vs 25)
- want income and stability with lower portfolio volatility
- want the lowest fees: saves ~$15/yr per $10K vs TIP
- want income and stability with lower portfolio volatility
💰 What the Fee Difference Actually Costs
Adjust the numbers for your situation. This models each fund's expense ratio compounding against your balance over time.
Assumes a constant annual return reinvested, with each fund's expense ratio deducted yearly. Illustrative only; actual returns vary. Past performance does not guarantee future results.
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