The fund tracks the Bloomberg U.S. Government Inflation-Linked Bond index and invests across US inflation-linked Treasuries of various maturities. When prices rise, the principal value of the bonds rises with them, helping protect against the loss of asset value caused by inflation.

It suits conservative investors who expect prices to keep rising, or who want to manage inflation risk within a bond portfolio.

It is a passively managed (index-tracking) ETF launched in 2007 by State Street (SSGA).

The fund holds inflation-linked Treasuries issued by the US Department of the Treasury, weighted by market capitalization. It follows a passive strategy that takes advantage of the way TIPS principal adjusts with changes in the price index, giving investors a practical means of protecting against inflation.

• A Treasury portfolio specialized in hedging inflation
• One of State Street's portfolio series products

Assets under management (AUM) stand at $1.1B, and the expense ratio is 0.12% per year.

Demand tends to increase, and performance tends to be strong, when inflation concerns are growing. Conversely, in phases when interest rates rise sharply, returns can slow because of falling bond prices.

Fund flows respond sensitively to macroeconomic inflation data releases, and shifts in breakeven inflation, the market's expectation for price increases, have a major influence on investor sentiment.

It is a low-cost product true to its purpose of defending against inflation, but bond price risk from interest rate changes remains.

SCHP, shown in the table, is a low-cost alternative managed by Schwab, while TIP is iShares' flagship product, with large scale and liquidity by industry standards. You can also consider products such as STIP that focus on short-maturity inflation-linked Treasuries to reduce sensitivity to interest rate volatility. If you want inflation protection while reducing the risk of price declines from interest rate moves, a short-term TIPS ETF such as VTIP can be a suitable choice.

This is a checklist to review before deciding to invest in SPIP. You should fully understand the distinctive return structure of inflation-linked Treasuries and the effect of interest rate changes on bond prices, and size your position accordingly.

If inflation comes in lower than expected or interest rates rise sharply, performance may trail that of conventional bonds. Investors should also understand in advance the complex return structure of inflation-linked Treasuries.

It is an efficient tool for investors with the clear goal of defending against inflation. However, because it carries interest rate sensitivity, it is advisable to hold it at an appropriate weight from an overall asset allocation perspective.