These Are the Top Ten Inflation Protected Mutual Funds

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We all know what inflation is, but not many of us consider it when making investments. Inflation, or the general rise in price level, can have a significant impact on your return. It won’t reduce your returns in absolute terms, rather lower your real returns. For instance, if you earned a return of 8%, but […]

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April 2, 2021 5 min read

This story originally appeared on ValueWalk

We all know what inflation is, but not many of us consider it when making investments. Inflation, or the general rise in price level, can have a significant impact on your return. It won’t reduce your returns in absolute terms, rather lower your real returns. For instance, if you earned a return of 8%, but the inflation rate is 3%, then your real return is just 5%. So, it is important that you always keep in mind the inflation rate when making investments. One good way to beat inflation is to invest in an inflation protected fund. Detailed below are the top ten inflation protected mutual funds on the basis of return.

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Top Ten Inflation Protected Mutual Funds

We have used the past one year return data (from U.S. News) to rank the top ten inflation protected mutual funds. Following are the top ten inflation protected mutual funds:

  1. VY® BlackRock Infl Protected Bd Port (IBRIX, 9%)

The purpose of this fund is to maximize the real return that is consistent with prudent investment management. During normal market conditions, the fund invests a minimum of 80% of its net assets in inflation-indexed bonds of different maturities. The fund has a net expense ratio of 0.56% and has given a return of 6.08% over the past three years, 4.59% over the past five years, and 3.35% over the past decade.

  1. DFA Inflation-Protected Securities Port (DIPSX, 10%)

The purpose of this fund is to provide protection against inflation, as well as earn an income in line with the inflation-protected securities. During normal times, the fund invests at least 80% of its net assets in inflation-protected securities. The fund has a net expense ratio of 0.11% and has given a return of 6.76% over the past three years, 4.98% over the past five years, and 3.96% over the past decade.

  1. PIMCO Real Return Fund (PRTNX, 10%)

PRTNX was launched in 1997. The objective of this fund is to track the return of TIPS, while giving a better return by investing a maximum of 20% of its asset outside the Barclays U.S. TIPS index. The fund has a net expense ratio of 0.93% and has given a return of 6.11% over the past three years, 4.86% over the past five years, and 3.43% over the past decade.

  1. BlackRock Inflation Protected Bond Fund (BPRAX, 10%)

The primary purpose of this fund is to maximize real return along with preserving real capital. BPRAX invests a minimum of 80% of its assets in inflation-indexed bonds, and may put up to 20% of its assets in non-investment grade bonds or emerging market securities. The fund has a net expense ratio of 0.9% and has given a return of 6.06% over the past three years, 4.6% over the past five years, and 3.25% over the past decade.

  1. Morgan Stanley Pathway Infl-Lnkd F/I Fd (TILUX, 11%)

The aim of the fund is to earn a return that is more than the inflation rate over an economic cycle. During normal times, TILUX invests a minimum of 80% of its net assets in fixed income securities. The fund has a net expense ratio of 1.22%, and has given a return of 6.51% over the past three years. TILUX has $149.98 million in total assets.

  1. Loomis Sayles Inflation Protd Secs Fd (LSGSX, 12%)

The primary objective of this fund is to earn a maximum return through a combination of capital appreciation and current income. Under normal market conditions, LSGSX invests a minimum of 80% of its net assets in inflation-protected securities. The fund has a net expense ratio of 0.4%, and has given a return of 6.88% over the past three years, 5.24% over the past five years and 3.80% over the past decade.

  1. American Funds Inflation Linked Bd Fd (BFIAX, 13%)

The purpose of this fund is to offer inflation protection, as well as income that is in line with the inflation-linked securities. BFIAX invests primarily in inflation linked securities. The fund has a net expense ratio of 0.7%, and has given a return of 7.02% over the past three years and 5.22% over the past five years. BFIAX has $9.46 billion in total assets.

  1. PIMCO Fixed Income SHares Series R (FXIRX, 14%)

The primary objective of this fund is to maximize real return along with preserving real capital. FXIRX invests a minimum of 80% of its net assets in the U.S. and foreign fixed income instruments. The fund has a net expense ratio of 1.35%, and has given a return of 8.56% over the past three years, 7.10% over the past five years and 5.83% over the past decade.

  1. DFA LTIP Portfolio (DRXIX, 15%)

The purpose of this fund is to earn a return in line with the inflation protected long-term instruments. DRXIX invests in the long-term fixed income securities that offer inflation protection. The fund has a net expense ratio of 0.15%, and has given a return of 11.52% over the past three years and 9.82% over the past five years. DRXIX has $293.94 million in total assets.

  1. PIMCO Long-Term Real Return Fund (PRAIX, 18%)

The objective of this fund is to maximize real return. PRAIX invests a minimum of 80% of its net assets in inflation-indexed bonds of different maturities. These bonds could be of U.S. and non-U.S. governments, and corporations. The fund has a net expense ratio of 1.1%, and has given a return of 11.96% over the past three years, 9.82% over the past five years and 7.07% over the past decade.