January was the best month ever for mutual fund inflows, with money funds gathering most of the cash.

Net inflows totaled $137 billion, 448% more than in December, the Investment Company Institute reported Tuesday. Last week the New York consulting firm Strategic Insight Mutual Fund Research and Consulting LLC reported a similar total, $140 billion.

The money fund net inflow, which also set a record, was $102 billion, up 525% from December, according to the ICI, a Washington trade group .

Equity funds also racked up strong gains - $24.5 billion of net inflows, an 89% rise, the group said. The figure for growth and income funds grew nearly fivefold, to $3.51 billion; fourteenfold for international equity funds, to $3.79 billion; and nearly fourfold for municipal bond funds, to $1.03 billion, the ICI reported. Hybrid funds and taxable bond funds went from net outflows -- $1.62 billion and $955 million, respectively - to net inflows of $1.19 billion and $7.57 billion.

Avi Nachmany, director of research at Strategic Insight, said that the growth in money funds, though tremendous, resulted from falling interest rates rather than changing investor preferences. Institutional investors were looking to earn a few basis points of spread profit in money funds by buying as the Federal Reserve was lowering rates, he said

Mutual fund consultant Geoff Bobroff said that despite the record growth in money fund assets - and recent instances of the funds' being stuck with defaulting commercial paper - there is no risk that fund advisers will run out of viable investment vehicles.

Even if the U.S. economy tips into a full-fledged recession, which would reduce the supply of the types of credit products money funds buy, there would still be plenty of high-quality financial instruments, domestically and abroad, Mr. Bobroff said.

Kathy Dennis, senior managing director at KeyCorp's Key Asset Management in Cleveland, said money-fund inflows seem not to be detracting from growth in other areas.

"We don't see a lot of investors running for cash funds," though bond funds are increasingly attracting interest after sliding for several years, she said.

Some fund companies are already reporting strong February sales of money funds, and some say sales of equity and bond funds slowed.

A spokesman for AIM Investment Management in Houston said that the growth rate equity funds enjoyed in January slowed in February but that the company continues to see strong growth in its money market funds, most of which target institutional investors.

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