A lackluster December in mutual fund sales closed the curtain on a year that wasn't overly dramatic for the industry, according to fund tracker Lipper of New York. While the S&P 500 rallied by 3.4% in the final month to help deliver a solid, 11.5% gain for the average domestic equity fund in 2004, fund flows sputtered in December as investors turned their attention to the holidays.

All told, funds lost $34 billion during the year. Equity funds took in $220 billion, but bond funds saw $14 billion in net outflows and money funds saw $240 billion drain away. The good news for the industry, however, noted Lipper Senior Analyst Don Cassidy, was the strong flow into equity funds, marking a "clear improvement in revenue mix" because of the funds' higher fees.

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