Comments on: Vanguard TIPS Fund Portfolio Changes

By: TFB

TFB — Mon, 14 Dec 2009 20:26:28 +0000

Richard – The absolute value of a mutual fund’s NAV is not very meaningful. If one fund has a lower NAV, you get more shares for the same amount of money. See previous post.

When a new fund or a new share class starts, the company can set the NAV to any arbitrary number and adjust the number of shares you get. It’s just math. VAIPX started in 2005. They started the NAV at about $25. At that time, VIPSX’s NAV is about $12.50. VTSAX started in 2000. They started the NAV at the same as that for VTSMX at the time.

By: Richard Pflueger

Richard Pflueger — Mon, 14 Dec 2009 19:26:53 +0000

Hello,
Why is the share/unit price for VAIPX (Admiral Shares) versus VIPSX (Investor Shares) not the same, or almost the same since they are both the same fund?

For example, in the Vanguard Total Stock Market Index Funds, VTSAX (Adm) and VTSMX (Inv) or 27.16 and 27.15, respectively. They are both the same fund with the only difference being in slightly lower expenses charged to the Admiral Shares.

Thank you.

By: TFB

TFB — Mon, 26 Oct 2009 02:34:55 +0000

Vincent – It can go either way. If interest rates rise purely because of inflation, the NAV of a TIPS mutual fund will stay flat but you will receive more in dividends (total return up). If interest rates rise but inflation doesn’t, the NAV of a TIPS mutual fund will go down.

By: Vincent Parziale

Vincent Parziale — Sat, 24 Oct 2009 18:46:00 +0000

If interest rates rise what happens to the NAV of a TIPS mutual fund?

I rececentl purchases a 20 year TIP with a coupon of 2.5 and YTM of about 2.35. The inflation factor was .99. Is it a good investment to hold on to or sell at this time since the value of the bond has risen?

By: M. Beetlestone

M. Beetlestone — Sat, 18 Jul 2009 20:04:08 +0000

Management fees? Front or rear load fees? May one sell anytime?

By: Ray Yurick

Ray Yurick — Tue, 14 Apr 2009 17:10:55 +0000

Actually, for TIPS, the interest rate is not adjusted, rather the principal is adjusted to account for inflation. I-bonds have the adjustable interest rate. The principal amount on TIPS can be reduced in the case of deflation–that is why there was not much interest in TIPS at the end of 2008–the fear of deflation.