Shifting assets from money market funds yielding near zero, investors stuffed a near-record $45.02 billion into bond funds in October. Also, skittish about a sell-off in stocks, they pulled $7.08 billion from stock funds.

Stock fund outflow was down from September's $10.38 billion.

Early indications were that stock fund outflow continued but slowed again in November. Bond fund inflow kept up in November, but not as heavily.

Bond fund inflow in October was short of September's revised $47.59 billion, which was the third monthly record in a row, according to the Investment Company Institute.

Still, October's was the second heaviest monthly bond fund flow ever. It topped August's $43.03 billion inflow.

A market rally stalled around mid-October. Upbeat earnings reported by high-profile companies were swamped by weak housing starts and glum producer price index data, which painted a picture of a weak recovery.

Stock funds that invest primarily in the U.S. disgorged $14.83 billion in October as the S&P 500 lost nearly 2% and the Nasdaq composite lost 3.64%. Investors took out $11.33 billion the month before.

Stock funds that invest primarily overseas took in $7.75 billion from investors in October vs. $951 million the month before. During the month, the MSCI EAFE index fell 1.29%, while the dollar fell 0.51%.

October was the second month in a row of stock fund outflow and the fourth this year.

Year to date, stock funds gave back $1.91 billion vs. $192.9 billion outflow in the year-earlier period.

Hybrid funds, which invest in both stocks and bonds, had inflow of $2.94 billion vs. $10.66 billion the previous month. For the year to date, hybrid funds took in $16.94 billion vs. $11.44 billion outflow a year earlier.

As investors flocked to bond funds in October, the yield curve steepened. Rates on long-term Treasuries rose 10 basis points to 3.41%. Three-month T-bill rates fell 9 basis points to 0.05%.

For the year to date, bond funds had inflow of $314.82 billion vs. $49.34 billion inflow a year earlier.

Taxable bond funds took in $40.26 billion last month vs. $37.46 billion the month before. Year to date, they had inflow of $253.40 billion vs. $36.05 billion a year earlier.

Investors pushed $4.77 billion into municipal bond funds in October vs. $10.13 billion in September. Year to date, inflow was $59.42 billion vs. inflow of $13.30 billion a year earlier.

Money market funds, which often have wide swings in flow, saw outflow of $71.80 billion in October vs. $126.91 billion the month before. October's money fund flow went into bond funds, says TrimTabs. Such a move suggests investors were taking on risk in search of yield.

Fund assets fell $144.1 billion, or 1.3%, to $10.688 trillion from $10.832 trillion the month before. They stood at $9.6 trillion a year earlier. Stock fund assets fell $126.8 billion, or 2.7%, to $4.596 trillion from $4.723 trillion the prior month. They were $3.936 trillion a year earlier.

Hybrid fund assets fell $2.6 billion, or 0.4%, to $604.5 billion from $607.1 billion the month before but were up from $515.5 billion a year earlier.

Bond fund assets rose $49.5 billion, or 2.3%, to $2.126 trillion from $2.077 trillion the month before and $1.558 trillion a year earlier.

Money fund assets fell $64.3 billion, or 1.9%, to $3.361 trillion from $3.426 trillion the month before and $3.590 trillion a year earlier.

Tsunami Subsides

Early indications were that bond fund flows fell in November. TrimTabs put bond fund inflow at $21.98 billion as of Nov. 20.

U.S. stock fund outflow was an estimated $6.53 billion. An estimated $2.9 billion of that outflow went into world equity funds. Another estimated $3.64 billion flowed to world stock ETFs.

This month going into Tuesday, the S&P 500 was up 6.76%. The MSCI EAFE gained 1.55%. The yield on 10-year Treasuries slipped to 3.37%.