An Inflation Play as Good as -- or Better Than -- Gold

Volpert, whose fund is up 5.7% year to date, says TIPS are "fairly priced right now." He points out that there are $430 billion in TIPS currently in a market that has been growing annually by about 10%, so "supply is good, but not overwhelming." Meanwhile, on the demand side, overall performance has improved so "we have been seeing a nice bid underlying the market."

Another Federal Reserve rate cut like the last one, however, would really boost TIPS, says Volpert.

"I'd be concerned if the Fed eases a lot more, because the Fed was talking tough about inflation and then surprised the market with a deeper-than-expected rate cut," says Volpert. "That justifies long-term concerns about inflation."

Those concerns are evident in the break-even rate, which in bond parlance refers to the difference between the yield on conventional Treasury securities and that of comparable TIPS. The current break-even rate on 10-year TIPS is 2.3%, which has climbed since this summer, but is still below April's 2.5% reading, and well below last year's peak of almost 2.8%.

More troubling for inflation watchers, however, is the five-year forward rate, which measures inflation over the long term. That rate is now at 2.6%, up from 2.53% before the Fed's dramatic rate cut, as well as some relatively benign August CPI data.

"The CPI is backward looking, but the market looks forward," says Volpert. "The Fed rate cut was dovish to the point where many people are wondering if more easing is on the way."

And perhaps more interest in TIPS.

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