Bond funds saved the day in 2002, netting the mutual fund industry $72 billion in inflows into all classes overall, according to year-end data that Lipper released today.

While equity funds lost $10 billion, their first year of outflows since 1988, following the crash of ’87, bond funds attracted a record $130 billion in 2002. Money market mutual funds also suffered last year, losing nearly $50 billion in assets due to their low interest rates.

"With their bear-claw wounds still fresh and with uncertainly high, investors stayed in retreat towards the comfort of current income," said Donald Cassidy, senior research analyst at Lipper.

Lipper also released December figures today, indicating that "investors in mutual funds were as tightfisted as holiday shoppers in December," as Lipper put it. For the month, equity and money funds showed outflows of $5.5 billion and $37.2 billion, respectively, while bond funds recorded modest gains of $4.2 billion.

Bond buyers in December continued to favor short and intermediate bond funds and sell out of long-term bond funds, according to Lipper. As well, gold-oriented funds, one of the few bright spots in 2002, continued to have strong inflows of $200 billion in the month, in anticipation of Iraq conflict. Natural resource equity funds, meanwhile, also benefited from the geopolitical situation, taking in $100 billion, according to Lipper.

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