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Hungry for Yield

Investors plowed $2.6 billion into global bond funds in the week ended Mar. 3, the biggest one-week haul in more than a decade, according to EPFR Global. And they pulled $30 billion out of money market funds. With the federal funds rate in a range of 0% to 0.25% for nearly 15 months, most money market funds now yield less than 0.1%. "Holding cash is a prohibitive strategy," said Tim Brunne, a Munich-based credit strategist at UniCredit. In contrast, the Barclays Capital Global Aggregate Bond Index has returned 9% since the Federal Reserve last lowered rates, in December 2008. Morningstar's favorite world bond offerings include Pimco's unhedged Foreign Bond Fund as well as the dollar-hedged Pimco Foreign Bond, which has lower exposure to currency fluctuations. Morningstar analyst Miriam Sjoblom explains that unhedged bond funds "offer a lot of diversification away from U.S. markets, but they come with a lot of volatility." Over the past year, the hedged Pimco fund returned 23%, and the unhedged version gained 33%.

Dishing on Dish

Shares of Dish Network fell by more than $1 on Mar. 4, to 20.59, after a U.S. appeals court ruled the satellite subscription service is still in violation of a TiVo (TIVO) patent. Dish argued that it had changed its technology enough to avoid infringement, but TiVo claimed the changes weren't sufficient; Tivo's shares are up 67%. The ruling may sound bad for Dish, but independent analyst outfit Collins Stewart reacted by upping its rating of the company's shares. It expects that most of the negative impact of the judgment is priced in and that shares could climb as high as 30 over the next 12 months. "We see this ruling as the last major obstacle because the company's fundamental turnaround is well under way," the report said. Analysts at Credit Suisse (CS) agreed, noting that closure on the litigation "is ultimately a good thing for Dish and should serve to remove an overhang on the shares." They estimate the stock is worth 25.

The Rally Tally

The S&P 500 has climbed more than 68% since bottoming last March, the biggest 12-month gain since 1936. Share prices more than doubled for 205 companies—including Genworth Financial, which rose to more than $16, from a low of 84 cents. Ten companies have the dubious distinction of losing value over the past year (table, right).

Is there hope the rally still has legs? Among S&P 500 companies, the stocks of 456 are trading at 10% or more below their all-time highs, including Berkshire Hathaway, Alcoa, Tenet Healthcare, and Halliburton. Meanwhile, two dozen or so are at or near record highs, such as Apple, General Mills, Estée Lauder, and Ross Stores.

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