inflation-protected bonds = IPB
(I choose this term because I don't want to limit this question to US TIPS);
yield to maturity = YTM.
Whenever deciding to invest in a bond ETF, should you always invest in one that features at least some IPB?
I refer NOT to ETFs that hold exclusively IPB. Instead, I ask about ETFs that hold:
- IPB (at the minimum)
- and/or only other bonds with YTMs that exceed the IPBs' YTM.
Call these ETFs: IPB as Safety Net. Does this etfdb.com list show some IPB as Safety Net?
Here's my guess. Suppose you invest in an IPB as Safety Net. The worst outcome is: you gain nothing, but at least you are protected against inflation. Right?
Whereas for any other ETF without IPB, the worst outcome is: if inflation surpasses the YTM, then you'll be always worse off, compared with the IPB as Safety Net.