No. of Recommendations: 6
I was looking at some inflation-adjusted TIPS-style bond funds today. While Vanguard's is 100% Treasuries, the Fidelity and American Century funds have some commercial stuff in them.

That's all well and good, I thought -- there are a few inflation-adjusted corporates around. But when I look at the holdings, it turns out they aren't inflation-adjusted at all.

In at least some cases, those holdings look like the same collateralized debt and mortgage-backed stuff that has everyone so flustered in other funds.

So how do they make them "inflation-adjusted"? Looks like they have a big credit-swap derivative that trades a fixed nominal rate for a TIPS-style real rate.

Another reminder to read not just the prospectus but also regular fund reports.

dan
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