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Fidelity Inflation-Protected Bond Index Fund (FIPDX) is a distinctive investment vehicle designed to provide investors with protection against inflation and a potentially higher return than traditional index funds. This fund aims to achieve its goal by investing in a diverse array of inflation-protected bonds, which are securities designed to offer a hedge against inflation risk.

The primary advantage of investing in FIPDX lies in its ability to help investors maintain their purchasing power in the face of rising inflation. This is achieved by allocating the fund's assets primarily to Treasury Inflation-Protected Securities (TIPS), which are US government-issued bonds that adjust their principal value in line with changes in the Consumer Price Index (CPI). This means that the interest payments made to investors will increase in tandem with inflation, effectively preserving their purchasing power over time.

In contrast, traditional index funds typically invest in a broader range of assets, such as stocks and bonds, which may not offer the same degree of inflation protection. While these funds can provide strong returns in favorable market conditions, they are also vulnerable to fluctuations in the value of the underlying assets and may not effectively shield investors from the negative impacts of inflation.

FIPDX boasts a diverse portfolio that includes some of the largest holdings in the inflation-protected bond space. Among these are the US Treasury Inflation-Protected Securities with maturities in 2023, 2024, and 2026, which collectively form a significant portion of the fund's assets. This broad exposure to the TIPS market ensures that the fund is well-positioned to capitalize on the benefits of inflation protection.

In summary, Fidelity Inflation-Protected Bond Index Fund (FIPDX) offers investors a unique opportunity to hedge against inflation risk while potentially outperforming traditional index funds. By investing in a range of inflation-protected bonds, FIPDX aims to preserve purchasing power and deliver returns that remain resilient in the face of rising inflation.