State Street Global Advisors (SSgA) has enhanced its fixed income product suite with the launch of the SPDR Barclays 0-5 Year TIPS ETF (SIPE).

TIPS offer a degree of inflation protection in a rising interest rate environment.

The fund, which has been listed on the NYSE Arca, offers investors a potential opportunity to protect their portfolios from inflation and diversify their fixed income allocations to prepare for rising interest rates.

The fund is linked to the Barclays 0-5 Year US Government Inflation-linked Bond Index, an index designed to measure the performance of the inflation protected public obligations of the US Treasury commonly known as “TIPS” that have a remaining maturity less than five years.

TIPS are securities issued by the US Treasury that are designed to provide inflation protection to investors. The index includes publicly issued TIPS that have fewer than five years remaining to maturity on index rebalancing date, with an issue size equal to or in excess of $500 million.

Jim Ross, executive vice president and global head of SSgA’s SPDR ETFs business, said: “With rising rates on the horizon, investors are increasingly relying on ETFs to manage duration risk within their fixed-income allocations. The new SPDR Barclays 0-5 Year TIPS ETF seeks to offer these investors a hedge against inflation that’s less sensitive to interest rate changes than longer duration TIPS funds.”

The fund has an expense ratio of 0.15 percent.

SSgA manages more than $413 billion in SPDR ETF assets worldwide (as of December 31, 2013) and is one of the largest ETF providers globally.