FlexShares iBoxx® 5-Year Target Duration TIPS Index Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the iBoxx® 5-Year Target Duration TIPS Index (Underlying Index).
1. Combine the inflation hedging attributes of TIPs with duration management
2. Calculate modified adjusted duration for TIPS securities with maturities from 3 to 20 years
3. Adjust portfolio weights to reach a modified adjusted duration of approximately five (5) years
Though investment involves compensation for risk in the form of return, investors must:
This is particularly important in today’s environment, in which global markets are highly interconnected and experience more volatility in the form of price movement. Unexpected market shocks (or tail risks) are more common and change the view of normal investment distributions. The following risk solutions may complement investors' portfolios by providing a investments that seek to mitigate exposure to risk, while seeking to receive compensation for that risk.
The iBoxx® 3-Year Target Duration TIPS Index measures the performance of Treasury Inflation Protected Securities (TIPS) as determined by Markit iBoxx's proprietary index methodology. The iBoxx® index methodology targets a modified adjusted duration of 3.0 years and defines the eligible universe of TIPS as having no less than one year and no more than ten years until maturity as of the Index determination date. A proprietary regression calculation is then used to determine the modified adjusted duration of the TIPS and weight the TIPS in the Index at a modified adjusted duration level within a range of 3.0 years, plus or minus 5% within Index constraints. One cannot invest directly in an index.