U.S. TIPS Strategy

US TIPS Strategy

Since our inception in 2019, Vanward has been at the forefront of U.S. Treasury Inflation-Protected Security (TIPS) research, thought leadership, and active management. Our U.S. TIPS strategy seeks to provide investors with a hedge against future inflation by maintaining predominantly U.S. TIPS investments. Our investment process is focused on the long term and employs a collection of time-tested strategies within inflation-indexed markets, which are diversified to avoid reliance on any one tactical strategy. This "Pure Play" strategy avoids credit and real-asset exposures, as well as the unrelated-to-inflation volatility that frequently accompanies them.

Investment Criteria:
Combining quantitative and qualitative analysis, our independent research serves as the foundation of our investment process. We exploit market inefficiencies in U.S. Treasury Inflation-Protected Securities (TIPS) and non-U.S. inflation-indexed markets using three primary strategy categories:

- Fundamental Strategies: Using proprietary quantitative models, our investment team identifies real rate levels and curve slopes that are historically inconsistent with current economic fundamentals. Periodically, this analysis and the expertise of our investment team will determine modest duration or yield curve positions relative to the index.
- Non-Directional Strategies: Our research has uncovered several consistent and recurring inefficiencies in the U.S. TIPS market, and our investment team frequently positions our portfolio to capture the relative excess return available from these inefficiencies. Auction cycles, seasonal patterns, performance index extensions, inflation accruals, and roll down contribute to these market inefficiencies.
- These strategies involve out-of-index positions on the U.S. Treasury market and foreign sovereign inflation-indexed markets.