The mutual fund industry typically focuses on weekly and monthly fund flow figures.

But a look at the bigger picture presents a mutual fund industry that has been stagnating for the last three years.

At the end of 2007, total assets reached a record $12.02 trillion. As of November, 2010, assets were $11.50 trillion. That's a decrease of 4.3%.

And flows in 2010 have essentially been a wash. The $244.96 billion that has moved into bond funds in the first 11 months of 2010 has been all but cancelled out by the $255.39 billion investors have yanked from money market funds and the $68.7 billion they've taken out of U.S. equity funds.

The net result is a mere $27.96 billion in inflows to long-term and money market funds through November 2010.

Let's put that $27.96 billion into perspective. In the five years prior to the credit crisis of 2008, net inflows to mutual funds averaged $1.15 trillion a year. In 2007, investors poured in $1.61 trillion, to hit the record.

In those five years from 2003 to 2007, assets increased 12.89%. Per year.

For an industry obsessed with growing assets under management, this is grim news.

Maybe, just maybe, investor sentiment is reversing course and people will return to stocks.

In the week ended Dec. 22, 2010, investors placed $14 million into U.S. stock funds-the first positive weekly net inflow into U.S. equity funds since late April, just before the Flash Crash. Then, again, in the week ended Dec. 29, inflows to U.S. stock funds surged to $493 million. And since mid-November, investors have redeemed more than $20 billion from bond funds.

But bright spots are spotty. In the past three years, bond fund assets rose $960 billion to $2.64 trillion. But stock fund assets declined $1.2 trillion to $5.32 trillion. After initially surging $800 billion in 2008, money market funds declined by $300 billion to $2.82 trillion.

All asset classes-especially the more profitable, actively managed equity funds-need to return to strong in-flows for the industry to regain its momentum.

Here's hoping for a prosperous New Year for money market, bond and stock funds. Together.