Retirees automate inflation-protected income with TIPB

Northern Trust’s 2035 Inflation-Linked Distributing Ladder ETF (TIPB) holds U.S. Treasury Inflation-Protected Securities (TIPS) that mature in successive calendar years through 2035. The fund distributes coupon income and returns principal to shareholders on an annual schedule as each maturity rung is reached.

Each rung in TIPB’s ladder consists of TIPS that mature in a specific year. TIPS adjust their principal with changes in the Consumer Price Index (CPI), so the amount returned at maturity and the periodic interest payments reflect measured inflation.

The ETF makes periodic income distributions from coupon interest and inflation adjustments, and it pays principal to shareholders when TIPS in a maturity year come due. Investors can hold a single traded fund instead of buying multiple individual TIPS across many maturities and managing reinvestments or rollovers.

An ETF differs from an individual bond: an ETF does not have a contractual obligation to deliver a fixed principal amount on a set date. ETF shares trade on an exchange at market prices that can deviate from net asset value (NAV). The NAV of a distributing ETF will generally decline as the fund makes income and principal payments.

Market price fluctuations and brokerage costs can reduce investor returns. The fund carries interest rate and market risk; inflation adjustments aim to reduce inflation risk to principal but do not eliminate market or rate risk.

Investors should review the prospectus for details on objectives, risks, charges and expenses before investing. Northern Funds Distributors, LLC is the fund distributor. Northern Funds Distributors and FlexShares are not affiliated with Northern Trust. The fund is not FDIC insured and its value may fall.

TIPB provides a calendarized maturity schedule through 2035 with inflation-linked principal adjustments and scheduled principal repayments, packaged in a single traded vehicle that delivers periodic income distributions.