Fiscal cliff? What fiscal cliff?

Despite the possibility that Washington may not reach a compromise in time to ward off the fiscal cliff, markets ended the week ended Dec. 12 up more than 1.3%. On top of that, fund investors injected $12.7 billion into mutual funds and ETFs for the week, according to Lipper data.

Equity funds recovered their groove last week, dominating the buying with net sales of nearly $5 billion for the week.

But whereas ETFs received the majority of net inflows and achieved its third consecutive week of $7 billion or more inflows, equity mutual funds continued to post net redemptions. ETFs attracted $8.7 billion, while equity mutual lost $3.7 billion.

Taxable bond funds reported net inflows of $1.2 billion, with the majority of cash allocated to corporate investment-grade products. Their high-yield counterparts finished the period with net inflows of $259 million, a lower rate than for the two prior weeks.

Municipal debt funds enjoyed their sixth consecutive week of net inflows at $311 million, while money market funds attracted $4.0 billion.