Treasury Inflation Protected Securities - TIPS
TISP refers to a US Treasury securities that are protected from inflation. Actually, they are not really "protected," but offer coupon payment and underlying principal increased for inflation impact, as measured by the Consumer Price Index (CPI).
As all Treasuries, TIPS offer coupon payments at every six months and principal payment at the date of maturity. By being so secured, Treasury Inflation Protected Securities offer less returns when compared to other investments. United States are not the only country that offers this type of securities; other countries have similar vehicles as well. In Canada, for example, they are called real Return Bonds - RRB.
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