FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (TDTT)
- Triplet 59
- 5 days ago
- 4 min read
ISIN: US33939L5066
A Quiet Giant: The Origins and Heritage of FlexShares
The FlexShares ETF family was launched by Northern Trust Asset Management, one of the world’s oldest and most respected financial institutions, with origins dating back to 1889. Headquartered in Chicago, Northern Trust manages over USD 1 trillion in assets, serving institutional investors, pension funds, and private clients globally.
The FlexShares brand embodies Northern Trust’s belief that investment vehicles should be designed with purpose — blending practical, data-driven solutions with accessibility and cost efficiency. The FlexShares iBoxx 3-Year Target Duration TIPS Index Fund (TDTT) perfectly represents that philosophy: a precision tool for investors seeking short-term protection from inflation while maintaining liquidity and moderate duration exposure.
Launched in September 2011, TDTT has grown to become one of the most trusted inflation-hedging ETFs in the U.S. fixed-income market.
The Investment Vehicle: Structure, Objective, and Style
Behind ISIN US33939L5066, TDTT is a U.S.-listed exchange-traded fund that seeks to track the performance of the iBoxx® 3-Year Target Duration TIPS Index.
This benchmark measures the performance of U.S. Treasury Inflation-Protected Securities (TIPS) with a target modified duration of approximately three years — meaning it focuses on shorter-term inflation-protected bonds, where interest rate sensitivity is modest but inflation protection remains intact.
The fund’s objective is to provide inflation-linked income and capital preservation, making it a useful allocation for investors who want exposure to real yields without the volatility of long-duration TIPS.
Philosophy, Style, and Approach
The TDTT ETF is built on a rules-based, transparent methodology. It invests in TIPS issued by the U.S. Treasury, where both principal and interest payments adjust with changes in the Consumer Price Index (CPI). This structure makes TIPS a unique instrument — one of the few asset classes designed to explicitly protect purchasing power.
By maintaining a target duration of around three years, TDTT minimizes price sensitivity to interest rate fluctuations while retaining inflation protection. This balance makes it especially appealing in environments where inflation uncertainty is elevated, but rate volatility remains a concern.
FlexShares’ disciplined indexing approach ensures predictable exposure, low turnover, and high liquidity. With an expense ratio of just 0.18%, the fund combines efficiency with reliability.
Track Record, Performance, and Benchmarks
Since inception, TDTT has closely mirrored its benchmark, consistently delivering returns that reflect real U.S. Treasury yields plus inflation adjustments.
Historically, shorter-duration TIPS funds like TDTT have exhibited lower volatility than long-duration peers such as those tracking 10-year or full-duration TIPS indices. During periods of inflation surprises — such as 2021–2022 — TDTT’s holdings effectively captured the CPI adjustments, providing tangible real-return benefits.
Benchmark comparisons often include:
iBoxx 3-Year Target Duration TIPS Index (primary)
Bloomberg U.S. Treasury TIPS 0–5 Year Index (comparable universe)
TDTT’s annualized performance has generally tracked between 1–3% real returns depending on inflation trends and yield conditions.
Use Cases, Investor Base, and Institutional Appeal
The ETF’s investor base is diverse, spanning:
Institutional investors using TIPS as a hedge against inflation in liability-driven mandates.
Financial advisers incorporating short-duration inflation-linked exposure within diversified portfolios.
Private investors seeking to preserve purchasing power during volatile rate cycles.
TDTT may be used tactically to adjust portfolio duration or strategically as a core real-return component within fixed-income allocations.
Regions, Availability, and Accessibility on Verī
Through the Verī Platform, the FlexShares iBoxx 3-Year Target Duration TIPS ETF is available globally, enabling advisers and institutions to incorporate inflation-protected exposure within regulated investment accounts.
Its presence on Verī reflects growing global demand for diversified fixed-income solutions that respond dynamically to inflationary environments.

Integration with Verī Platform and MPS
On the Verī Platform, TDTT is globally accessible, offering investors across Africa and beyond a route to hold short-duration U.S. inflation-protected bond exposure within a regulated investment account. Within the Verī Managed Portfolio Service (MPS), such ETFs might be used to help manage real-return objectives, offering a defensive component against inflationary pressures.Depending on strategy composition, TIPS-based exposures like TDTT might appear in balanced or conservative models where maintaining purchasing power is part of the investment goal. The MPS framework allows advisers and institutions to integrate such assets efficiently while retaining control over diversification and reporting.
Costs, Fees, and Efficiency
Expense Ratio: 0.18%
Average Duration: ~3 years
Asset Class: U.S. Treasury Inflation-Protected Securities (TIPS)
Fund Size: Over USD 4 billion
Distribution Frequency: Monthly
Exchange: NYSE Arca (U.S.)
Its efficiency, liquidity, and inflation sensitivity make it a widely used solution for real-return strategies across both institutional and retail portfolios.
Comparative Advantages and Risks
Advantages:
Explicit inflation protection via U.S. Treasury TIPS
Low duration and moderate interest rate sensitivity
Low-cost, transparent structure
Monthly income distribution
Risks:
Real yields can turn negative in deflationary or disinflationary periods
Sensitive to changes in inflation expectations
Currency exposure (for non-USD investors)
Limited long-term capital appreciation potential
How Verī Platform Helps Clarify
At Verī, our mission is simple: to provide access to the entire universe of investments — from income to accumulation strategies, passive to active approaches, low-risk to high-risk instruments, across all asset types, currencies, and regions.When we highlight funds or securities such as this one, it is not an endorsement, recommendation, or promotion of that specific investment. Rather, it is a demonstration of the wide spectrum of options available through the Verī Platform.Our role is to enable access and transparency — giving investors and institutions the ability to see, compare, and evaluate a universe of choices, so they can make their own informed decisions in line with their objectives and responsibilities.
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Disclaimer
“This article is provided by Verī strictly for informational purposes only. It is not intended as financial advice, a recommendation, or an endorsement of this investment. The details shared are educational, aimed at broadening knowledge of the investment universe available.”
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