A relatively new kind of bond—TIPS—may offer a way to capture fixed income returns while limiting exposure to inflation risk.

Bonds are not nearly as safe as people tend to think—not even Treasuries. Bond values are particularly sensitive to changes in the rate of inflation. For all practical purposes, they are just as volatile as some categories of stock. But a relatively new kind of bond—TIPS—may offer a way to capture fixed income returns while limiting exposure to inflation risk. What are TIPS, how do they work, and are they a worthwhile addition to a diversified portfolio?

Download TIPS: Bonds that Protect Against Inflation.