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Unformatted text preview: PERSPECTIVES: INFLATION-LINKED BONDS: POWERFUL PORTFOLIO DIVERSIFIER During all of 2007 and well into 2008, inflation-linked bonds experienced a remarkable run. A broad index of U.S. inflation-linked bonds rose nearly 12% in 2007 and climbed nearly 5% during the first six months of 2008, outperforming many other asset classes, including equities. Though inflation- linked bonds ended 2008 down 2.35%, their performance contrasts sharply with broad equity indexes such as the Russell 3000 Index, which declined 37.31% over the same period, as illustrated in the chart below. INFLATION-LINKED BONDS HAVE LOW CORRELATION WITH STOCKS To Learn More About Our Mutual Funds, Visit www.tcasset.com. Source: TIAA-CREF Asset Management Research The Russell 3000 Index measures the performance of the stocks of the 3,000 largest publicly traded U.S. companies, based on market capitalization. The index measures the performance of about 98% of the total market capitalization of the publicly traded U.S. equity market. The Barclays Capital U.S. TIPS (Treasury Inflation Protected Securities) Index (formerly the Lehman Brothers U.S. Treasury Inflation Protected Securities Index) measures the performance of fixed-income securities with fixed-rate coupon payments that adjust for...
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This note was uploaded on 01/24/2011 for the course ACCT 201 taught by Professor Iker during the Spring '08 term at Susquehanna.
- Spring '08
- Managerial Accounting