BOSTON ( TheStreet) -- U.S. investors poured a net $22 billion into stock funds last quarter after favoring bond funds for most of the previous two years, following a rally in companies including tech darlings ( CRM), Netflix ( NFLX) and Apple ( AAPL).

For all of 2010, equity funds suffered outflows of $36.4 billion, about half that of the previous year and the smallest amount since 2006, according to preliminary data collected by fund-tracking firm EPFR Global, which included exchange traded funds. Bond funds' outflows totaled $7.3 billion in the fourth quarter, holding net inflows for the year to $178.4 billion.

Stock-fund inflows in the fourth quarter marked the return of so-called retail investors, or average Americans, who had been keeping as much as $1 trillion parked in safer securities such as fixed-income investments, according to some analysts. Still, investors have a conservative bent, favoring Dow stocks and other income and dividend investments. Funds that buy those types of securities had inflows of $6.2 billion in 2010, said Brad Durham, managing director of EPFR Global.

Mutual fund managers including Legg Mason's Bill Miller and Donald Yacktman of the Yacktman Focused Fund are favoring the largest U.S. stocks after trailing their rivals last year. Still, investors have boosted the share prices of growth companies, including cloud-computing company, movie-streaming provider Netflix and Apple, maker of the iPhone and iPad, while shunning the likes of mega-cap companies General Electric ( GE) and Pfizer ( PFE).

That's as nine of the 10 sectors in the S&P 500 Index saw improved earnings in the fourth quarter compared with a year earlier, according to Thomson Reuters.

The stock-market rebound has been different this time around, as investors may still be scarred from the crash of 2008, analysts said. In addition, keeping some of them in bond funds longer were crises including Europe's debt woes and political conflicts in Asia.

As a result, some investors missed out on a late-year surge in stocks. U.S. equity funds posted, on average, a one-year return of 16.6% in 2010, beating the S&P 500's 15% gain, including a 6.4% increase in December, the best performance by stock funds in that month since 1999, according to Lipper Fund Market Insight.

Industry analysts say those fourth-quarter results may well represent a tipping point in fund investors' preferences, even though fund flows seesawed week by week in the period and it wasn't until December that the pendulum clearly swung in favor of stock funds.

"There is still some skittishness lingering among investors, which is probably healthy," given that the economy has weathered the eurozone debt crisis, flash crash and a host of other challenges, Durham said. "(But) both institutional and retail investors are seeing value in U.S. equities again for the first time in a long while."

Morningstar mutual fund analyst Russell Kinnel said investors have been more cautious, a change from previous years that tempered the stock-market rebound.

"The strong returns you saw in 2009 from stock funds would have suggested a much-sooner move, but the bear market of 2008 and the continued scary headlines this year" have kept stock-fund investors more risk-averse, he said.

But the fourth quarter shift of flows into stock funds and out of bond funds is the first break in the pattern of investing since the 2008 crash, which provides some evidence that a shift in investor sentiment may be underway.

Indicative of conflicting behavior, the Investment Company Institute reported that stock funds posted inflows of $390 million in November, compared with outflows of $24 million in October, while bond funds had outflows of $875 million in November and inflows of $22 billion in October.

Lipper FundFlows Insight Report notes that November was the first month in 23 that bond-fund flows were negative.

The reluctance of mutual-fund investors to push into stock funds was one of 2010's surprises by Dirk Hofschire, a Fidelity Investments vice president of market analysis, commenting in a year-end markets review. "With U.S. stocks up more than 90% from their March 2009 low, historical behavior patterns suggested investors would be flocking to stocks in droves."

But from January through October, mutual-fund investors pulled a net $64 billion from U.S. stock funds and put $223 billion into bond funds, according to Fidelity.

Fund-flow amounts cited by various firms may vary, depending on their sources and categories.

Hofschire said bond investing will likely remain strong in 2011 as an aging population increasingly looks for income and sticks with more conservative investments.

Also indicative of a potential change in investor sentiment was seen in the money-fund sector. Although low interest rates continued to prompt redemptions, with outflows of $485 billion for all of 2010, there were inflows of $22.7 billion in the fourth quarter. That reversal kept the fund category from potentially suffering another record year of outflows, as it ended up shy of the record-breaking $513 billion in 2009.


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