iShares TIPS Bond ETF (TIPS): Complete Beginner's Guide
Last updated: March 2026 • BlackRock • Inflation-Protected Bond
Expense Ratio
0.19%
AUM
$20.0B
Dividend Yield
2.80%
Inception
2003
Beginner Score
9/10
What is iShares TIPS Bond ETF?
TIPS invests in U.S. Treasury Inflation-Protected Securities, which are government bonds whose principal value adjusts with inflation. This means your investment is designed to keep pace with rising prices over time. For beginners worried about inflation eroding their savings, TIPS offers a straightforward way to add inflation protection to a fixed-income portfolio.
TIPS is managed by BlackRock and has been available since 2003. With $20.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.19%, which means for every $10,000 you invest, you pay approximately $19 per year in management fees.
TIPS at a Glance — Key Metrics
| Expense Ratio | 0.19% |
| Total Holdings | 50 |
| P/E Ratio | N/A |
| Beta | 0.12 |
| Dividend Yield | 2.80% |
| AUM | $20.0B |
| Inception Year | 2003 |
| Issuer | BlackRock |
Top 10 Holdings in TIPS
TIPS holds 50 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | U.S. TIPS 0.625% 2043 | TIPS | 6.50% |
| 2 | U.S. TIPS 1.0% 2049 | TIPS | 5.80% |
| 3 | U.S. TIPS 0.875% 2029 | TIPS | 5.20% |
| 4 | U.S. TIPS 0.125% 2031 | TIPS | 4.80% |
| 5 | U.S. TIPS 1.375% 2044 | TIPS | 4.50% |
| 6 | U.S. TIPS 2.125% 2054 | TIPS | 4.20% |
| 7 | U.S. TIPS 0.75% 2028 | TIPS | 4.00% |
| 8 | U.S. TIPS 1.75% 2034 | TIPS | 3.80% |
| 9 | U.S. TIPS 2.375% 2053 | TIPS | 3.50% |
| 10 | U.S. TIPS 0.5% 2030 | TIPS | 3.20% |
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TIPS Performance History
Here's how TIPS has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
1.00%
1 Year
4.00%
3 Year
1.50%
5 Year
2.50%
10 Year
2.20%
Beginner Suitability Score: 9/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
TIPS scores 9/10 because it has very low fees, shows lower-than-average volatility, focuses on 50 selected holdings, and has been available since 2003, giving it a proven track record.
How to Buy TIPS — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "TIPS" — Use the search bar in your brokerage platform to find iShares TIPS Bond ETF.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
Dollar Cost Averaging Into TIPS
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With TIPS's expense ratio of 0.19%, a $10,000 investment would lose approximately $1,613 to fees over 20 years compared to a zero-fee investment. This is significant — consider whether the fund's strategy justifies these costs.
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Pros and Cons of TIPS
Pros
- ✓Principal adjusts upward with inflation, providing real purchasing power protection
- ✓Backed by the full faith and credit of the U.S. government
- ✓Effective hedge against unexpected increases in consumer prices
- ✓Solid historical performance during periods of rising inflation
Cons
- ✗Underperforms regular bonds when inflation is lower than expected
- ✗Longer-duration TIPS can still lose value when real interest rates rise
- ✗Tax treatment of inflation adjustments can create phantom income in taxable accounts
TIPS vs Similar ETFs
See how TIPS stacks up against similar funds:
Frequently Asked Questions
Is TIPS a good ETF for beginners?▾
TIPS has a Beginner Suitability Score of 9/10 on our scale. This makes it a strong choice for new investors due to its low fees and focused strategy.
What is the expense ratio of TIPS?▾
TIPS has an expense ratio of 0.19%. This means for every $10,000 you invest, you pay approximately $19 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in TIPS?▾
You can invest in TIPS with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does TIPS pay dividends?▾
Yes, TIPS pays dividends with a current yield of approximately 2.80%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in TIPS?▾
The top holdings in TIPS include U.S. TIPS 0.625% 2043 (6.50%), U.S. TIPS 1.0% 2049 (5.80%), U.S. TIPS 0.875% 2029 (5.20%), and more. The fund holds 50 total positions, providing focused exposure to selected companies.