The iShares Barclays TIPS Bond Fund (Ticker: TIP) seeks investment results that correspond generally to the performance, before fees and expenses, of the inflation-protected sector of the United States Treasury market as defined by the Barclays U.S. TIPS Index. The index includes all publicly issued U.S. Treasury inflation-protected securities that have at least one year remaining to maturity, are rated investment grade and have $250 million or more of outstanding face value. In addition, the securities must be denominated in U.S. dollars and must be fixedrate and non-convertible. The index is market weighted and the securities are updated on the last calendar day of each month.
Inflation-protected public obligations of the U.S. Treasury, commonly known as 'TIPS,' are
securities issued by the U.S. Treasury that are designed to provide inflation protection. TIPS
are income-generating instruments whose interest and principal payments are adjusted for inflation. The inflation adjustment, which is
typically applied monthly to the principal of the bond, follows a designated inflation index, such as the consumer price index. A fixed coupon rate is applied to the inflation-adjusted principal so that as inflation rises, both the principal value and the interest payments increase. Because of this inflation
adjustment feature, inflation-protected bonds typically have lower yields than conventional fixed-rate bonds.