Investors pouring into bond and money market funds

With U.S. bond yields rising and money market rates holding steady, some investors are pouring cash into bond and money-market mutual funds, data show:

* Purchases of bond fund shares totaled $3.2 billion the first two days of this week, more than double the $1.4 billion that went into U.S. stock funds in the period, according to TrimTabs Investment Research, a Santa Rosa, Calif.-based firm that tracks market trends.

* Cash inflows to money market funds totaled $39.03 billion in the seven days that ended Tuesday, the biggest weekly increase since July 2003, according to IMoneyNet.com. The surge lifted total money fund assets to a record $2.49 trillion.

Yields on high-quality bonds have risen sharply since March as the economy has picked up speed. The 10-year Treasury note yield hit a nine-month high of 4.99% on Tuesday. It eased to 4.97% on Wednesday.

Higher bond yields are attracting income-hungry investors and those who are looking for a less-volatile investment than stocks, analysts say.

As for money market funds, their average seven-day annualized compound yield was 4.83% as of Tuesday, IMoneyNet said. Because the Federal Reserve has signaled that it is likely to keep short-term interest rates steady for the foreseeable future, money fund yields are expected to remain near current levels.