Thought Leadership

Managing Inflation Risk for Tax-Efficient Investors

June 20, 2005

Income oriented investors must be concerned not only with the absolute level of income their fixed income investments generate, but also with the degree to which their income maintains its purchasing power.  Despite recent innovations in the fixed income markets, including the introduction of Treasury Inflation Protected Securities (TIPS) in 1997, there remain few viable choices for income oriented investors concerned with tax-efficiency.  A close look at the structure of TIPS and their municipal counterparts (Municipal CPI bonds) helps to explain why there are no complete