How to use TIPS in your portfolio

Treasury Inflation-Protected Securities (TIPS) are U.S. government bonds designed to hedge against inflation by adjusting principal and interest payments based on the Consumer Price Index. They offer fixed interest rates with semiannual payments but carry risks like volatility and sensitivity to interest rate changes, particularly for longer-term maturities. Investors can purchase TIPS directly, build ladders, or invest in TIPS funds or ETFs like those offered by iShares.