In my rush to get this month's article out before taking a trip, I wrote, "Equity valuations are high, which are tailwinds for domestic stocks." Obviously, high valuations are a headwind for stocks.
https://www.mutualfundobserver.com/2025/06/protecting-against-tariff-induced-inflation/In regard to Professor Snowball's article, Aegis Value Fund (AVALX), I have been studying AVALX for the past several weeks. I like it for its small cap "deep" value approach and long-term performance. I purchased it this morning after a cup of coffee and its recent dip.
Comments
Funds may be wrong vehicles for TIPS:
1. Funds don't mature & the benefit from the main feature of TIPS is lost in TIPS funds (OEFs or ETFs).
2. TIPS funds also have strong duration effect. While this applies to TIPS ladders too, there is the (preferred) option to hold components to maturity.
3. TIPS funds have to distribute inflation adjustments annually - whether earned or not. So, if there aren't enough inflows, some holdings must be sold to pay required distributions.
Vanguard short-term inflation protected bond fund (VTAPX) has 20% of its bonds with maturities of 0-1 year. It follows an indexing strategy of buying bonds each quarter so that some mature each quarter. While I did not find any mention in the literature of holding until maturity, I presume that a bond that matures this quarter is held until maturity.
https://investor.vanguard.com/investment-products/mutual-funds/profile/vtabx#portfolio-composition
Regardless, short-term inflation protected bonds have performed much better than short-term Treasuries over the past five years.
https://www.mutualfundobserver.com/2025/07/protecting-against-tariff-induced-inflation/
The BlackRock iShares iBonds ETFs buy inflation protected bonds to replicate a rung on a bond ladder so individual inflation protected bonds mature at a specific date and the investment is returned at a specific date. For example, iShares iBonds Oct 2030 Term Tips ETF (IBIG) holds three inflation protected bonds with maturities between January and July 2030 and the fund is terminated in October 2030. For me, the simplicity outweighs disadvantages.
https://www.ishares.com/us/products/333128/ishares-ibonds-oct-2030-term-tips-etf/
Regards
Morningstar recommends all funds all the time - that was its origin. But even M* relented recently that TIPS ladders may be better than TIPS funds,
https://www.morningstar.com/funds/ladder-up-investors-should-reconsider-how-they-use-tips-funds
More https://ybbpersonalfinance.proboards.com/post/2057/thread
https://www.tipsladder.com/
Single best source for information on TIPS.
https://tipswatch.com/
ETF creation units are generally exchanges "in kind" (i.e. not cash transactions). So even Authorized Participant redemptions don't deal (much) with cash.
There may be a small cash component in the basket to deal with price fluctuations or liquidity constraints. For example, ICI's FAQ on ETFs says: