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A Contrarian Play On Inflation Fears

Sunday, July 11, 2010 - 4:25 AM
http://online.wsj.com/article/SB10001424052748704314904575250742311465022.html?mod=WSJ_article_related
If the Federal Reserve raises rates next year, floating-rate funds could be poised to beat short-term bond funds in both yield and price appreciation, just as they did from 2003 to 2006, says Mr. Schindler, who uses the funds in nearly all of his clients' portfolios. During that period, the Fed raised the federal-funds rate 17 times, from 1% to 5.25%. Floating-rate funds beat short-term bond funds by about 4.2% a year during that period, according to Morningstar.

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Feb 22, 2010
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