That’s because TIPS and all other indexed-bonds are not for “investment” use. They are merely a better storage unit than cash and other ordinary bonds.
If you have a lot of money flowing around to invest in high risk/high yield, enough to do your own hedging and enough time to manage you profilo and make choices, good for you, but many others do not have the options. That’s why some buy stocks, some buy bonds, some buy funds, some fixed with banks, some got con’d into subprime derivatives.
TIPS and other indexed are designed for people who have enough of money to retire
with but not enough to play [with] the market so much. That’s why nobody wants to sell, and that’s why Wall Street went against it in the first place as they cannot charge transaction fees with it.
Also, on TIPS, if you have been reading data, or not hiding under a rock in the past couple years, US has been running towards deflation, (see http://krugman.blogs.nytimes.com/2010/11/17/disinflation-continues/), at least disinflation, not inflation, CPI has been low, and there is also the delay in data released and adjustment, so yield is low for soon matured bonds. When you look at long term, yield is up again. Still despite deflation, especially in deflation, people get original money back, in terms of real income, gain not loss.
And what are US bonds’ rates anyway? http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/, look at long term, trend with TIPS coincide.
So somehow you are risk averse, like many American who are facing severe unemployment, but you have a modest saving, you expect high inflation for whatever reasons in the long term, so you want to put money(at least part) in something equal to bond risk. TIPS can be a good option. Some people worry inflation, some people don’t. You against them having options?
If you don’t know (or don’t care, I will give you the benefit of the doubt)the basic concept behind TIPS, how do you categorise it? Do you equate US T-bill with say some blue chip security? If you don’t know or don’t care the concept behind real rate and real income, how can you tell if TIPS is a gain or loss? Or do you assume everybody invest in the same manner or has the same capacity or face the same level of risk?
Furthermore, if you are so worried about management fees, what don’t you buy it from the Treasury “Direct” http://www.treasurydirect.gov/indiv/myaccount/myaccount.htm? You think govt can charge a lower admin cost?
Better still, the govt is selling bond, a mere promise to pay in the future. It won’t hurt anyone even if the thing tanks so bad. The only bad situation is severe and prolonged deflation, where the govt need to pay high value cash and people stop buying the thing due to the deflation.
Ignore theory? You are arguing from ignorance dude. Oh, if inflation-indexed is so useless, how do you explain every major economic power having at least one? Are they, what, all stupid? For a similar question, we understand that cash is a very bad storage unit, but why do we all hold cash anyway? Answer: different fucking functions.
oh by the way, do I have to be a man to know a man when I see a man? 「你投資緊啲乜？」is really meaningless. The question is, if your argument/critique is credible, why didn’t you mention the same instruments that exist litertarily in every major country? The question, thus, is about you partiality and bias.
Now, if you had argued how sucky HK ibond is with the comparison to other inflation-indexed bonds, then that would be a meaningful discussion. If you had mere said how sucky HK ibond is without comparison, then you are just being ignorant and failed to do research. On the other hand, if you had argued how sucky HK ibond is with full knowledge of TIPS and especially the history of TIPS, and still not make the comparison, I have every reason to doubt that you are arguing for your interest group, meaning the financial sector.