S&P Expands Family of Fixed Income Indices with launch of TIPS Index

Adding an important piece to its growing family of fixed income indices, S&P Indices announced the launch of the S&P/BGCantor U.S. TIPS Index – the only index in the market to use pricing exclusively …

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 from BGC Market Data LP. The S&P/BGCantor U.S. Treasury Inflation Protected Security Index is a broad, comprehensive, market value-weighted index that seeks to measure the performance of the U.S. Treasury Inflation-Protected Securities (TIPS) market.

S&P Indices also announced today that it is now publishing the S&P/BGCantor U.S. Treasury Bond and Treasury Bill Indices on an intraday basis.  The S&P/BGCantor U.S. Treasury Index family is a broad, comprehensive, market-value weighted family of indices that seeks to measure the performance of the U.S. Treasury market.

TIPS is an acronym for Treasury Inflation Protected Securities, marketable Treasury securities whose principal is adjusted according to changes in the Consumer Price Index (CPI). TIPS are designed to provide protection against inflation, with the principal of the security increasing with inflation and decreasing with deflation, as measured by the CPI. According to the Securities Industry and Financial Markets Association (SIFMA), the market value for TIPS outstanding as of end of March 2011 is $640.8 billion.

The S&P/BGCantor U.S. TIPS Index is a market-value-weighted index.  Index weights are based, in part, on outstanding Par Amounts for securities. BGC Market Data LP provides the inflation adjusted price of each bond in the Index. The prices used in the Index calculation add the accrued interest to the market price of each security reported by BGC Market Data LP each day. The Index is rules driven, the hallmark of which is transparency and predictability.

“As the ever present risk of inflation continues to weigh on the minds of investors, we are pleased to align with BGC Market Data LP to provide additional insights into the TIPS market,” says J.R. Rieger, Vice President of Fixed Income Indices at S&P Indices.

Source: ETFWorld – S&P Indices