Last week, a solid majority of fund types reported their best weekly inflows of the year while money market funds experienced large outflows, writes Joe Morris for Ignites.

EPFR Global data shows where all the money has moved: $1.62 billion went into global bond funds, $540 million found its way into emerging-market bond funds, $925 million funneled into the real estate sector, $1.74 billion flowed into global equity funds, and money funds lost $47.2 billion.

Some ETFs representing these areas include:

• SPDR Barclays International Treasury Bond Fund (NYSEArca: BWX): up 6.6% year-to-date

• PowerShares Emerging Mkts Sovereign Debt (NYSEArca: PCY): up 37.7% year-to-date

• iShares Dow Jones U.S. Home Construction (NYSEArca: ITB): up 37.2% year-to-date

• SPDR S&P World ex-US (NYSEArca: GWL): up 25.9% year-to-date

• WisdomTree U.S. Current Income Fund (NYSEArca: USY): up 2.1% year-to-date

Commodity sector funds also added $1 billion last week, accumulating more than $9 billion in year-to-date inflows.

• iShares S&P GSCI Commodity Indexed Trust (NYSEArca: GSG): up 2.8% year-to-date

Investors are becoming more confident, but many still remain cautious about the market. U.S. bond funds have seen net inflows every week this year and recently saw an increase by $2.79 billion. Global bond funds have seen inflows for 23 straight weeks.

• iShares Lehman 7-10 Year Treasury Bond Fund ETF (NYSEArca: IEF): down 5.4% year-to-date

Value funds are outperforming growth funds for the first time since late August. U.S. stock funds received $340 million, mid-cap ETFs, U.S. sector funds and actively managed big-cap growth funds all raked in new money as big-cap blend ETFs saw outflows.

• Vanguard Total Stock Market (NYSEArca: VTI): up 22.8% year-to-date

• Vanguard Large-Cap ETF (NYSEArca: VV): up 20.8% year-to-date

Max Chen contributed to this article.

With the consumer price index dropping 0.4% in the past 12 months as of March, deflation is the concern du jour, but the copious amount of government borrowings could start shaving away at your savings in the near future, remarks John Waggoner for USA Today.

But don’t worry. There are some asset classes that still rise in value during times of inflation. Waggoner suggests looking into inflation-beating investments that include Treasury Inflation-Protected Securities (TIPS), gold, commodities, real estate and money market funds.

TIPS. TIPS are essentially long-term government IOUs. They provide a fixed rate of interest until maturity, but the government will adjust the principal of TIPS up or down according to inflation on a monthly bases.

• iShares Barclays TIPS Bond (TIP): up 2.1% year-to-date

Gold. Gold is shiny to look at, has many uses across the spectrum, and more importantly, it always holds some value. The precious metal has been increasing in value in the last five years and is typically seen to move opposite the value of the U.S. dollar (although there have been exceptions to this rule).

• SPDR Gold Shares (GLD): up 2.9% year-to-date

Commodities. When there is inflation, everything rises in price. A good way to capitalize on the rising prices of basic materials is through ETFs. But it should be noted that some commodity funds do have large weightings in energy.

• PowerShares DB Commodity Index Tracking (DBC): down 7.5% year-to-date

Real Estate. During stable markets, home prices tend to follow the consumer price index. If you locked in low mortgage rates in inflationary times then you may be paying less in real terms. A way to invest in real estate funds is through real estate investment trusts (REITs).

• First Trust S&P REIT Index Fund (FRI): down 15.9% year-to-date

Money Market Funds. Money funds usually keeps up with inflation, but they don’t guarantee a set yield. You only get what the short-term market provides.

Max Chen contributed to this article.

As in basketball, no one really knows when a rebound is going to take place until it’s happened. And given the markets lately, Allen Sloan for The Washington Post points out that it isn’t helpful to note that the markets tend to rise in the very long-term.

But take a look at the following statistics and facts:

• The Wilshire 5000 , which is the broadest measure of the U.S. stock market, is down 51.4% from its peak in October 2007.
• Dividends, which once was used as a selling point for owning the broad stock market through an index, are being slashed at record rates.
• Money market funds are earning less than 1%
• Short term U.S. Treasury securities are returning nearly nothing and rates on long-term notes are so low that they might be in a bubble

All we can hope for is that the worst is behind us and the markets will start to bounce back and these devastating times will be behind us and something to read about in history books.  We suggest that if you are going to get back into the market to watch the trend lines, don’t get over excited (or over-panicked), diversify, educate yourself and keep your own personal investment goals in mind.

Since the disastrous mid-September panic when Reserve funds dipped below $1-per-share net asset value, money market funds gained $56 billion in assets, writes Beagan Wilcox for Ignites.

By Nov. 12, money funds hit $3.63 trillion in assets and in September, before the fiasco, total money fund assets were $3.58 trillion.

Prime money funds that invest in commercial paper, certificates of deposit and other taxable investments with the greatest outflows in September/October are gaining momentum.

Prime institutional money funds, which saw more than $400 billion in outflows during September/October, gained $21 billion in assets by Nov. 12. During that time, prime institutional money funds lost $418 billion while insitutional government money funds gained $337 billion.

After the Reserve funds broke the buck, net outflows totaled about $125 billion. By October, there were net inflows every week.

Retail prime money funds continue losing assets but on a lesser scale compared to the two weeks following news of the Reserve funds.

Even after investors who were burned by lack of transparency in these and other areas of the market, the industry seems to be hurting as assets were pulled out. Will this ultimately be to the benefit of ETFs?

With all the news and uncertainty going on in the markets, many investors are wondering what to do with their exchange traded funds (ETFs) and their portfolios. Here are some questions that we’ve received from readers and wanted to share with all of you.

Now that the Dow has suffered its largest one-day point loss ever, as an ETF investor, what do I do?

We use and recommend a trend-following strategy, which involves being in those areas of the market that are trending higher and being out when they’re not. We get in only when a fund is above its 200-day moving average, while we get out when a fund drops 8% off its recent high or below the 200-day moving average.

Right now, very few areas are trending higher, and as a result we’re 100% in cash. We’re waiting for this storm to pass.

What if I’m a buy-and-hold investor?

Obviously, buy-and-hold investors are in it for the long-term, riding out those peaks and valleys. However, the recent market activity has to be making even the sturdiest buy-and-hold investor a little seasick as they wait for the markets to move higher once again. If you have this strategy, you don’t necessarily have to take this if it’s become too much for you. If it would make you feel more comfortable to sell all or part of a position while the volatility continues, do so. When the trends appear again and you’re ready, get back in.

How do I know when it’s time to get back into the markets?

Going back to our trend-following strategy, we wait until funds have moved above their 200-day moving average before we consider them. We look at other things too, such as diversity within the holdings, expense ratios, trading volume, fundamentals of the sector or area the fund represents, and so on. But above all else, a fund has to be above its long-term trend line.

What we don’t recommend doing is chasing performance, running from area to area, looking for the “hot” fund or trying to call the bottom of a tanking sector. For more detailed information on this strategy, read our trend-following report.

Is my money safe at the bank?

If your bank is FDIC-insured, it means that your account is protected for up to $100,000 per depositor (not per account, but per individual). The $100,000 amount applies to all depositors of an insured bank, except for owners of certain retirement accounts, which are insured up to $250,000 per owner, per insured bank.

Is my money market fund safe?

Ask your brokerage where your money is being held if you aren’t sure. If it’s in Treasuries, then your money may be safer than it would be in other types of funds. Some of the money market funds that “broke the buck” in recent weeks did so because of exposure to Lehman Brothers.

For our clients, we have selected the Schwab Government Money Fund, which invests in treasuries issued or guaranteed by the U.S. government, and it’s the safest money fund there.

Is my brokerage safe?

Your investments at your brokerage are insured by the Securities Investor Protection Corporation (SIPC), which is for both securities and cash, in the event of a broker-dealer failure. SIPC provides up to $500,000 of protection for each account.

Is this volatility ever going to end?

Yes. Over time, the overall trend of the markets is up, interrupted by periods of high volatility such as the one we’re in now. Eventually, we will recover from this, too, and we’ll begin to see areas that are once again moving higher.

Any other questions?

Leave us a comment, and we’ll get back to you with an answer!

Last Monday, the funds added $1.5 billion; on Tuesday, they added $26.2 billion; on Wednesday, they added $19.6 billion, reports Erin Kello for Mutual Fund Wire.

On Sept. 17, nerves were rattled when the Reserve Primary Fund “broke the buck” because of exposure to Lehman Brothers. The last fund to break the buck was the Community Bankers Mutual Fund in Denver in 1994. Money markets are considered the safest investments after cash, treasuries and bank deposits.

Year-to-date, assets in the funds are up by $178 billion, or 8.1%.

However, Murray Coleman for IndexUniverse reports that many industry observers believe more are on the way. Given the anticipation of these funds, questions arise about ETFs “poaching” money markets.

Despite the formation of these funds, none of these ETFs will be able to refer to themselves as money markets. As a result of regulation put into place by the Investment Company Act of 1940, specific rules designate what is and is not a money market fund, what it can and cannot invest in, and finally, the risks it can take.

More specifically, Rule 2a-7 allows for certain accounting procedures to make daily record keeping possible, in order to maintain the NAV of money market funds at $1/share. With ETFs, trying to avoid breaking a NAV of $1/share has become a serious accounting obstacle.

Despite the similarity of money market funds and short term fixed-income ETFs, the New York based lawyer involved in the creation of the first ETF, Kathleen Moriarty makes an interesting point. She points out that regulatory actions that have been put into place keep ETFs and mutual funds as distinct and separate products. She says, “Not being able to call an ETF a mutual fund–even though both are basically big baskets of stocks–hasn’t hurt the ETF industry at all.”

With more money market-like ETFs expected to be released, only time will tell if ETFs will “poach” money markets.

An ETF that falls into this category is:

• WisdomTree US Current Income Fund (USY), inception May 20, 2008