U.S. mutual fund investors are plowing billions of dollars into stocks via heavy equity fund inflows and record money market outflows, according to a report from the Washington-based Investment Company Institute.

The ICI, which monitors mutual fund investing in the U.S., says the combined assets of U.S. mutual funds rising to a record US$7.536 trillion in January. “Net sales stood at US$30 billion in January, with a whopping US$43.8 billion going into equity funds – the biggest inflow in stocks since early 2000,” says National Bank Financial, commenting today on the ICI report.

Conversely, cash remained out of favour with most investors with a US$20 billion outflow. “Investors have reduced their cash holdings by a record US$277 billion over the past year,” NBF reports. “The still positive earnings outlook combined with the Fed’s commitment to keep interest rates low for the foreseeable future is resulting is an unusual depletion of cash reserves.”

The ICI notes that cash in money market mutual funds was down to US$2 trillion in January, the lowest level in almost three years.