Investors picked up the pace a bit as they put about $3.8 billion back into equity mutual funds in the week ended June 30, although bond funds continued to see outflows in the week the Fed announced its long-awaited interest rate increase.

Index funds were especially popular, with $2.25 billion going into the ( IWM) iShares Russell 2000 Index fund, according to fund tracker AMG Data Services. TrimTabs, another mutual fund flow tracking company, differed in its estimates but still reported a net $2.3 billion inflow to equity funds last week, the sixth consecutive week of increased investment. Trim Tabs director of research Carl Wittnebert said the company now estimates a total equity mutual fund inflow of $9 billion for all of June.

"It's not the $20 billion, or even $50 billion, we saw in one month of the bull market," he said. But investors did reverse a selloff that began in early May and left inflows flat for that month. "That did not carry through. Looking at a lot of superb one-year performance numbers, people felt they wanted to have at least part of their money in equities."

But the arrival of "the best-announced rate hike in history" marked a continued outflow from most types of bond funds, though hybrid funds that mix stocks and bonds saw inflows of $554 million for the week.

TrimTabs reported net bond fund outflows of $1.3 billion, and AMG said taxable bond funds had a net outflow of $859 million, mostly from government bond funds and investment grade corporate bond funds. The company also said investors fled municipal bond funds last week, with a net outflow of $632 million.

Only high-yield bond funds, which invest in bonds that more closely correspond to stock movements, saw an inflow last week, with $2.1 billion in net new investment.

AMG reported that money market funds saw a net outflow of $48.1 billion, the largest since the week ended Oct. 1, 2003. Money market funds generally lag banks in raising their rates after the Fed moves on interest rates, said Peter Crane, vice president and managing editor of I-MoneyNet. Investors could be headed for short-term certificates of deposit, which now average around .98% for a 90-day CD, according to Bankrate.com.

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