Despite January's strong market rally, investors showed little interest in equities, pulling $2.8 billion from U.S. stock funds, in stark contrast to the $15.7 billion that flowed into these funds a year earlier, according to Morningstar.
Today's Morningstar's January mutual fund report included the following highlights:
Inflows for long-term mutual funds reached nearly $34.0 billion in January, reversing December's outflows of $9.8 billion and eclipsing the $31.2 billion investors deposited in January 2011.
January's redemptions were the smallest monthly outflow for the asset class since $2.1 billion fled in May 2011.
Taxable-bond funds topped all asset classes with inflows of $24.6 billion in January, the best month for these funds since August 2010. Municipal-bond funds continued their recovery as well, with inflows of $6.6 billion, the greatest monthly inflow these funds have seen since September 2009.
Demand remained strong for emerging-markets bond funds, which collected record inflows of $2.0 billion in January. Meanwhile, interest in world-bond funds remained weak.
Diversified emerging-markets funds saw inflows of $2.7 billion in January to keep international-stock funds in positive territory.