TIPS Funds (Treasury Inflation Protected Securities) are bonds that are issued by the US government. They are indexed to inflation so as to protect their holders from inflation. Over the long-haul, they have not performed as well as traditional bonds, however, if used properly they do have their place. TIPS and corporate indexed bonds are a good hedge against inflation, and more importantly, protection against devalued traditional bonds in an inflationary setting. Most inflationary indexed funds lost a few percentage points during the recent economic upheaval, however, many traditional bond funds were in the negative double digits. As it appears that interest rates may be approaching their apex, many investors have moved out of them and back to traditional bonds.

Are TIPS Funds a Good Inflation Hedge for the Long Term? | Morningstar