Vanguard's VTIP ETF offers low-cost, low-risk inflation protection with short-term TIPS exposure.

The Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) provides investors a cost-effective and low-risk way to hedge against inflation by focusing on short-duration Treasury Inflation-Protected Securities (TIPS). VTIP tracks the Bloomberg U.S. TIPS 0–5 Year Index, maintaining an average maturity of about 2.6 years to minimize sensitivity to interest rate changes while locking in higher real yields. This makes it suitable for investors seeking short-term inflation protection amid a cautious inflation outlook and rising interest rates. With a very low expense ratio of 0.03%, VTIP is an efficient tool for balancing inflation risk and interest rate exposure.