Investors reversed November's outflow in December, putting $1.29 billion of new money into stock funds, according to the Investment Company Institute. In November, stock funds gave up $9.94 billion as markets looked shaky in the wake of the credit crunch and a mixed economic picture.

Thanks to a declining market, December's inflow wasn't enough to prevent a 1.1% decline in stock fund assets. The major indexes were down slightly for December, despite a late-month rally. The S&P 500 dropped the most at 0.86%.

The Federal Reserve slashed its key rate to 3.5% in December, but that failed to strongly boost the markets.

December was the ninth straight month in which investors favored international funds over those that invest in the U.S.

U.S. stock funds disgorged $7.96 billion to fleeing investors. The outflow was a marked decrease from November's $14.58 billion.

World equity funds took in $9.26 billion in December, up from $4.64 billion in November.

Overseas equity funds continued to get a boost in performance from the sliding dollar. Although the dollar rallied somewhat against the yen and the euro, it continued to slide against the British pound.

In all of 2007, stock funds picked up $92.44 billion in new money. A year earlier the total was $159.44 billion.

Cash in all stock funds was 4.2% of assets in December, the same as November's figure and up slightly from last year's 3.9%.

Inflow to hybrid funds, which invest in stocks and bonds, slowed. They drew in $810 million in December against $874 million in November. They picked up $22.13 billion for the year vs. $7.06 billion in 2006.

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