Equity funds posted modest inflows of just less than $2 billion in December, a substantial decline from the previous month when investors socked more than $10 billion into the products, according to fund researcher Lipper.

Analysts said investors were likely holding off on buying new products until January to stave off tax distributions for another year. And, likewise, they were more apt to redeem assets in funds with negative returns in order to absorb paper losses during the current tax year.

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