When you look up a TIPS mutual fund or ETF, you may see several different yield numbers. What do those mean and which one should you pay attention to?

In a taxable account, investing in a TIPS mutual fund or ETF has two advantages over investing in a basket of individual TIPS bonds: cash flow and the ease of tax reporting . A TIPS fund pays out both the interest earned and the inflation adjustment. The fund's shareholders report these distributions as taxable interest in the same way as they do for any other bond fund.

An investor can buy or sell shares in an open-end TIPS mutual fund at any time without a brokerage account. A search on Morningstar returned 66 funds in the "Inflation-Protected Bond" category with no load, an initial investment of $10,000 or less, and an expense ratio of 1.0% or less. That's plenty to choose from.

There are far fewer TIPS ETFs than there are open-end TIPS mutual funds. A search on IndexUniverse only returned only three TIPS ETFs. Two of them invest in TIPS in the U.S. One ETF invests in inflation indexed bonds outside of U.S.