TIPS finished the year with a very strong performance, their best since the 2016 second quarter. For the 2017 fourth quarter, TIPS posted a total return of 1.8%, much better than the 0.2% on comparable maturity straight Treasurys.
In what was a surprisingly quiet quarter for the Treasury market, TIPS outperformed straight Treasurys. According to my calculations, TIPS on average earned 0.9 percent in the 2017 third quarter compared to 0.6 percent for straight Treasurys.
As a result of the post-election sell-off in bonds, treasury inflation-protected securities recorded a loss of 3.0% in the 2016 fourth quarter, their worst performance since the 2013 second quarter.