Investment Quarterly for the 3rd Quarter of 2011 looks back at the behavior of U.S. Treasury Inflation Protected Securities over a period of extraordinarily low inflation. How did TIPS perform over that period, which exhibited none of the problems they were designed to ameliorate?

We also briefly examine the question of whether TIPS are a good barometer of future inflation. Finally, we discuss in greater detail the differences between three different ways to gain exposure to the risk/return characteristics of TIPS: a passive exchange-traded fund, a somewhat active open-end mutual fund, and a very active open-end mutual fund. In the process, the reader learns a few things about how SCLC evaluates investment options for our clients.