"There are better values elsewhere among high-quality bonds," says Steve Rodosky, an executive vice president at Pimco, which runs the giant Pimco Total Return fund (PTTAX), the country's largest bond fund; it's besting its peers again this year, with a 4.8% return so far in 2009. Pimco's chief investment officer, Mohamed El-Erian, was blunt at year's end, saying, "Get out of Treasuries. They're very, very expensive."

It's a tale of two markets in the mortgage-backed sector. There isn't much appeal in government-backed Ginnie Maes -- or in Freddie Mac and Fannie Mae securities, which carry an implicit federal backing. These securities yield just 4%. That means funds like the big Vanguard GNMA (VFIIX), now carrying a 4.3% yield, could have disappointing returns.

The riskier -- and more attractive -- part of the market is the so-called non-agency sector of home- and commercial-mortgage securities. These yields still can top 10%. Funds with exposure to the non-agency mortgage market include TCW Total Return (TGMNX), which has a current yield of 10%.

One way to bet against the Treasury market is to buy the ProShares UltraShort Lehman 20+ Year Treasury ETF (TBT), which is designed to rise at twice the daily decline in the prices of in long-term Treasuries. This exchange-traded fund changes hands at around $50 a share, up from $40 at year's end.

Tips are still good, because they protect bond investors from what they fear most: inflation. Investors can play TIPS through the Vanguard Inflation-Protected Securities fund (VIPSX), or an exchange-traded fund, the iShares Barclays US Treasury Inflation Protected Securities fund (TIP).

Tips are still good, because they protect bond investors from what they fear most: inflation. Investors can play TIPS through the Vanguard Inflation-Protected Securities fund (VIPSX), or an exchange-traded fund, the iShares Barclays US Treasury Inflation Protected Securities fund (TIP).

There are myriad ways to play any rally in corporate-bond prices. Some investments that Barron's suggested earlier this year still look attractive, including exchange-traded funds such as the iShares iBoxx $ High-Yield Bond ETF (HYG), open-end funds like Fidelity Capital and Income (FAGIX) and a host of closed-end bond funds that trade at a substantial discount to their net asset value.

There are myriad ways to play any rally in corporate-bond prices. Some investments that Barron's suggested earlier this year still look attractive, including exchange-traded funds such as the iShares iBoxx $ High-Yield Bond ETF (HYG), open-end funds like Fidelity Capital and Income (FAGIX) and a host of closed-end bond funds that trade at a substantial discount to their net asset value.