I have written a couple of pieces outlining the basics of Treasury Inflation-Protected Securities (TIPS), but Vanguard's research note takes it to another level.

If you want to learn more about the fine details of TIPS, I suggest you read their piece entitled "TIPS and the nature of inflation protection."

TIPS are generally seen as a hedge against inflation. It should be noted that there is plenty of negative press about the reliability of the CPI as an accurate measure of the cost of living (or increase in the cost of living). So, keep in mind, the "inflation protection" in TIPS is protecting against a rise in CPI and not the buyer's rate of inflation -- or increase in living expenses.  

More on TIPS from About.com:

A Primer on Treasury Inflation-Protected Securities

Pros and Cons of TIPS Mutual Funds

Fund companies are notorious for rolling out new investment products at the peak of the new product's underlying investment strategy. Remember the tech boom in the late 90s? Internet funds were popping up by fund companies looking to get a piece of the action -- and then pop went the tech bubble.

How about these so-called 130/30 funds? What is the hype? I haven't been privy to the sales pitches of the 130/30 fund purveyors (fortunately), but my guess is they are lamenting the future returns of equity markets and attempting to convince investors (and those who sell funds to investors) that they should invest their hard earned money in funds where fund managers' stock picks are greatly magnified compared to an index or passively managed fund -- to the tune of 160% of investor assets.

In the next month we will take a look at specific 130/30 funds, but for now, read more about the basics of 130/30 funds.

In August, I highlighted that Vanguard registered seven new bond index funds (Vanguard's New Funds -- Not For You). These bond funds, offered in Signal and Institutional Shares (available in financial advisor accounts, retirement plans, corporate accounts, etc.), with minimum investments of $5 million and $1 million respectively, are also available in the ETF structure. So what's the problem? Well, strangely, the investor share class is missing from the mix.

Vanguard defines the investor share class as:  "Traditional shares for individual investors. Investor Shares typically feature low minimum initial investments."

So, why is Vanguard not introducing the new bond funds in the Investor Share Class -- allowing more do-it-yourselfers to invest in the funds? Initially, I thought Vanguard was making a statement about the use of mutual funds and ETFs for the individual investor. But I was wrong, according to the public relations folks at Vanguard.

Josh Grandy, with Vanguard's public relations department, was kind enough to answer my questions when I called the firm. Apparently, Vanguard's reasoning for excluding the Investor Shares is that they believe the bond funds will be of more interest to advisors and institutions and hence the reasoning for offering the share classes that are being offered.

Josh also pointed out that individual investors can invest in the new bond funds through the ETF structure. For an important caveat of the ETF structure (particularly when it comes to bond funds), see Vanguard's press release.

It seems like yesterday that Y2K was making the headlines. Now the roaring 2000s (that one is for Harry Dent) are coming to a close.

We will soon start seeing a deluge of "mutual funds of the decade" accolades and "portfolio managers of the decade" awards.  Morningstar is already out with "The Fund Manager of the Decade Finalists."

Does it mean you should buy these top funds of the last decade? Well, I'm not sure what Morningstar is telling you, but the research indicates that investors shouldn't buy last year's, or last decade's, top performing funds.