MARKETS

A tip on TIPS: Relative return depends on both interest, inflation

By KATHLEEN GALLAGHER kgallagher@journalsentinel.com, Journal Sentinel

Sunday, July 13, 2003

If inflation-indexed Treasuries are supposed to provide stability and protect investors from inflation, why has the price of Steve Jaszka's TIPS mutual fund plunged?

That question -- posed by the Franklin investor to a journalist with no good answer but many good sources -- gets to the heart of investors' concerns:

Will TIPS do well if interest rates rise?

Rising interest rates usually spell trouble for bond investors, particularly those in bond funds. So investors like Jaszka are looking for fixed-income investments whose ...