Mutual fund investments fall $2.8 billion

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NEW YORK (CNNMoney.com) -- Investors continued to drain money out of mutual funds last week, adding to an even greater decline from the week before.

According to a report from TrimTabs Investment Research released Thursday, about $2.8 billion was withdrawn from equity-based mutual funds in the week ended Dec. 10. The week before, $12.1 billion flowed out of these funds.

"The report shows how much risk aversion there is," said Vincent Deluard, a TrimTrabs analyst. "Either money is going under mattress or people are losing their jobs and they need the money."

Mutual funds that invest primarily in U.S. stocks posted an outflow of $1.7 billion, after losing $8.3 billion the week before. Funds that invest in overseas stocks shed $1.1 billion compared with $3.8 billion that came out during the previous week.

Surprisingly, bond funds fell for the second week in a row. Though corporate bonds have not performed well this year, they have certainly outperformed stock-based funds, with the S&P 500 index falling 38% over the course of 2008.

But bond-based mutual funds suffered even bigger declines than stock funds, as investors took out $10.6 billion from those funds, compared to an outflow of $6.8 billion in the previous week.

Experts say investors are almost exclusively interested in U.S. Treasury investments, shunning even conservative corporate bonds.

"The bond outflow is truly specific to this crisis," said Deluard. "Even in the last recession, when we saw outflows of equities, there were inflows into bonds."

Exchange-traded funds, or ETFs, that invest in U.S. stocks posted an inflow of $8.4 billion, compared with an inflow of $920 million the previous week. ETFs of non-U.S. stocks grew $2.9 billion, compared with inflow of $643 million in the previous week.