Updated from 11:35 a.m. EST

Mutual fund investors appeared to be somewhat divided on how to deal with the slumping stock market in the last week, based on the contrasting results of two major surveys of capital flows.

Funds investing in equities had net outflows of $1.7 billion in the week ended March 24, following a $1.5 billion deficit the previous week, according to Trim Tabs Investment Research.

Meanwhile, AMG Data Services' latest survey showed net equity fund inflows of $582 million for the same period, after a net outflow of $22 million the previous week.

Phil Edwards, a managing director at Standard & Poor's, said the continuation of outflows might indicate a minor trend among active mutual fund investors.

The outflows a week ago followed renewed concerns about terrorism triggered by the group of blasts in Madrid two weeks ago, which contributed to the recent broad-based decline in stock prices, including a 6% correction for the Dow Jones Industrial Average.

"It doesn't surprise me that inflows to mutual funds have declined over the last week," Edwards said. "It's always the case that cash follows performance."

But Edwards also cautioned against making too much of short-term movements. He said mutual funds saw $150 billion in inflows in 2003. And according to the Investment Company Institute, some $49.78 billion flowed into mutual funds in January alone, which happened to be when the major indices were routinely hitting new highs in their year-long rally. In February, when the major indices appeared to be heading for a retreat and many strategists were almost counting the days to a long-awaited and much overdue correction, fund inflows slowed dramatically to $20.6 billion, according to AMG data.

Trends aside, Edwards noted: "There's still $7 trillion invested in mutual funds, and if you're talking about $3 billion in outflows, it's the equivalent of a rounding error," he said.

The most recent fund data covers a period when the major indices continued to hit new lows for the year, but not the market's major rally Thursday.

In particular, the Trim Tabs survey showed net outflows of U.S. equity funds, while international ones recorded net inflows. AMG's data also showed international funds benefiting as almost $300 million moved into the group, particularly Japan-oriented funds.

Kunal Kapoor, director of mutual fund analysis at Morningstar, said the move to international funds reflected portfolio managers' forecasts for better returns in other markets and investors' decision to chase the outsized returns of emerging markets, particularly through funds investing in China.

"Folks are concerned about the weak dollar, and they are trying to make these moves because of that," he said. "But we have also heard from portfolio managers that it's easier to find opportunities in international markets."

A closer look at the Trim Tabs data also helps illustrate this point. U.S. equity fund outflows were $2.1 billion in the last week, compared to $1.6 billion for the week ended March 17. But in the latest week, international equity fund inflows nearly quadrupled to $402 million.

Recent fund outflow data has raised the usual questions about whether investors are being a bit too reactionary in adjusting their portfolios, ignoring long-held principles about long-term investing and proper asset allocation.

Many investment banks and fund managers are a bit heavy on the equities side of their portfolios at the moment, with slightly more than the typical 60% allocation to equities and slightly less than the conventional benchmark 40% allocation to fixed income. Some managers, however, are shifting their stock holdings into more defensive sectors, such as health care, utilities and energy, while scaling back on technology, financial services, industrial and basic materials.

Differences in the findings of the two fund surveys are not uncommon, partly because of how the data is both broken down and categorized. The AMG calculates fund flows by tracking 17,000 shares of open-end mutual funds, while Trim Tabs surveys 20% percent of all U.S. equity and bond funds.

Richard Williams, director at Next Generation Equity Research, said mutual fund investor moves should be heeded more than they currently are.

"Most individual investors are a lot sharper than they're given credit for, but they can't analyze the data as fast as the professionals, and so they become contrary indicators," he said.

He said Thursday's rally was probably not going to have a lasting effect, particularly because quarterly earnings will be released soon and that will influence the market.

"Confession season is the last few days of March and the first few days of April, and it doesn't make sense to have a rally right now," he said. "I think there's reason to be cautious here."