[BOND] mutual funds, in the dumps much of last year, are making a mini-comeback. The bond market rally of late January, caused by expectations of a weaker economy and lower inflation, has sparked sales of funds investing in municipal, corporate, Treasury and even high-yield "junk" bonds.

The April-May crash last year shocked thousands of investors who bought bond funds thinking they provided stable returns. They were not prepared for the sharp declines in the April-May period, when some funds plummeted in net asset value per share by as much as 15 percent.

Some advisers fear that the recent bond market rally may be slowing and that interest rates may blip upward soon. Consequently, they recommend bond funds with shorter maturities. These will yield a bit more than money-market funds, yet won't have the price volatility of longerterm bond funds.