With the Federal Reserve continuing to raise rates, is owning FIPDX – Fidelity Inflation-Portected Bond Index Fund worth it? #shorts…(read more)

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In this week’s InvestTalk Call of the Week, we take a closer look at FIPDX, the Fidelity Inflation-Protected Bond Index Fund. This fund is designed to provide investors with exposure to inflation-protected bonds, which can help to preserve the purchasing power of their investments in the face of rising inflation.

Inflation-protected bonds, also known as TIPS (Treasury Inflation-Protected Securities), are bonds that are indexed to inflation in order to protect investors from the erosion of their purchasing power. This asset class can be particularly attractive in times of high inflation, as the principal value of these bonds adjusts with changes in the consumer price index.

FIPDX takes a passive approach to investing in inflation-protected bonds, tracking the Bloomberg Barclays U.S. Treasury Inflation-Protected Securities (TIPS) Index. This index includes TIPS with maturities of one year or more, providing investors with diversification across a range of inflation-protected securities.

One of the key benefits of investing in FIPDX is its low expense ratio, which can help to improve overall returns for investors. Additionally, investing in a broad index of TIPS can help to reduce the risk associated with individual bond selection, as the fund is diversified across a range of issuers and maturities.

In summary, FIPDX offers investors exposure to inflation-protected bonds in a cost-effective and diversified manner. As inflation concerns continue to grow, this fund may be a valuable addition to a well-rounded investment portfolio. Investors should consult with their financial advisor to determine if FIPDX is a suitable option for their investment goals and risk tolerance.