While some of the net inflows were due to seasonal deposits, the month’s activity continued the trend of investors tiptoeing back into financial markets, SI said in a press release. January 2010’s long-term fund inflows marked a significant improvement over net inflows in both the previous month ($23 billion) and in January 2009 ($24 billion).

Investors put about $30 billion into bond funds in January, according to estimates from Strategic Insight’s Simfund database. Inflows were experienced in both taxable bond funds ($25 billion) and municipal bond funds ($5 billion).

Roughly $5 billion net flowed into domestic equity and hybrid funds in January, a sign of slowly growing confidence despite a decline of 3.6% in the S&P 500 Index during the month. Investors put $10 billion into international equity funds, even though January was a down month for international stock indexes.

Separately, SI said exchange-traded funds (ETFs) experienced an aggregate $18 billion of net outflows during January, led by more than $15 billion of withdrawals from the SPDR S&P 500 ETF, the industry’s largest ETF (which SI noted typically experiences outflows in January due to early-year portfolio adjustments by investors).

SI’s estimates include open- and closed-end mutual funds, but exclude funds underlying variable annuities or ETFs.