Investing - Theory, News & General • Re: TIPS Interest & inflation Adjustments

Wouldn't this be a insignificant amount? In other words, why bother?

It might not be. Some shorter funds now hold TIPS that have a coupon payment of 1-2%. If inflation adjustment is 3-4% and 1-2% from coupons then it is not insignificant.

You can get a list of the TIPS held by a fund, and dump it in a spreadsheet. List the coupon for each listing. Adjust that by percent of holdings, and get a weighted average coupon. Subtracting the coupon portion will let you see how much was from inflation adjustment. Perhaps there is a simpler way to accomplish the same thing. I suppose you might get close looking at the TTM interest rate for that fund and subtracting the CPI for that time period. Keeping in mind the CPI adjustment to TIPS is 2 months behind.

For instance if the fund is VTIP, Vanguard lists the average coupon as 1.1%. You can find it on this page. You can also just ask Google what the average coupon is for VTIP etf.
https://investor.vanguard.com/investmen ... omposition

So for the most recent quarter they paid a dividend of about 5.5% on an annual basis. So I take it the coupon portion was 1.1% or 20% of the total dividend paid. That would imply the inflation portion was 4.4%.

I have an app that shows holdings, coupons, yields, durations, and average yield and duration for selected funds, including VTIP: Fund Holdings

The inflation adjustment factor for all TIPS for a given period is the ref CPI end of period divided by ref CPI beginning of period. You can look up ref CPI index values and % change with this app: CPI Explorer. Example using actual values:

refCpi_0 for 9/4/2025 = 322.61
refCPi_1 for 9/4/2026 = 333.95

inflation adjustment factor = refCpi_1 / refCpi_0 = 333.95 / 322.61 = 1.035

Subtract 1 and multiply by 100 to get the change in percent: 3.5%

Statistics: Posted by Kevin M — Fri Sep 04, 2026 4:08 pm