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Treasury Inflation Indexed Securities
Fixed-interest inflation-linked bonds issued by the U.S. Treasury whose principal is adjusted to inflation, the semi-annual interest payments and the principal paid back at maturity thus being pegged to inflation.
(1) The principal paid back at maturity is at least equal to the initial face amount (which is not the case in Canada: see real return bond).
(2) Originally, in the United States, these securities were called Treasury Inflation Protected Securities (TIPS). American TIPS should not be confused with Canadian TIPS (Toronto Index Participation Shares, which tracked the TSE 35), the first exchange-traded fund in the world.
Translations
Synonyms and variations
- TIIS
- TIPS
- Toronto Index Participation Shares
- Treasury Inflation Protected Securities