Welcome to the latest installment of our weekly fund review, in which we scrutinize the past week's notable fund news and tell you what it means for Foolish investors.

Investors return to domestic mutual funds
During the market turmoil of early and mid-August, mutual fund investors were running scared. They withdrew record amounts of money from their equity mutual funds, stuffing it into money market accounts and other safer havens. Now, as the market appears to be calming down, investors are buying back into domestic equity funds. Roughly $8 billion was added to stock funds during the week ending Aug. 22, compared to the prior week's outflow of almost $20 billion. However, investors remain wary of overseas investments, continuing to pull another $3.6 billion out of foreign funds that week. With all the uncertainty in the market right now, investors appear to be content to simply follow market returns and invest accordingly.

While investors' return to mutual funds is good news, they shouldn't have run away in the first place. History has shown that most of the time, when investors yank their money from the market, the next month the market actually goes up, and investors on the sidelines miss out. Although it's hard to tough out market downturns, don't try to time the market. Invest for the long term, and stick around during difficult periods.

And while investors seem to be temporarily shying away from foreign markets, remember that part of any investor's long-term allocation plan should include exposure to foreign markets. True, international stocks may not continue to provide the stellar returns they have the past few years, but you should maintain your exposure to at least some foreign countries at all times.

Metals funds lose; bear market funds gain
The past month's market volatility has produced a lot of winners and losers. While most mutual funds have suffered losses, some have been hit harder than others.

Precious metals funds have ranked among the biggest losers, down 15.4% from the market's peak in mid-July. These funds invest in stocks such as Meridian Gold (NYSE:MDG), Freeport McMoRan Copper & Gold (NYSE:FCX), and Newmont Mining (NYSE:NEM), which have fallen out of favor in recent weeks. On the flip side, bear-market funds have benefited from the market's fall; as a group, they're up 7.8% from mid-July. Since these funds are designed to do well when the market stumbles, they've been receiving a lot of attention from worried investors in recent weeks.

While it can be tempting to buy or sell based on short-term results like this, few investors actually get ahead this way. Metals and mining funds are very volatile, and their fast, sharp fall should not be surprising. Conversely, while bear-market funds may have their uses, it's very difficult to make money in them. These funds lose money more often than they make it, and it's extremely difficult to move into and out of them at the correct times. Just because a segment of the market has done well the past few months, there's no guarantee it'll continue to do well. Stay focused on the long term, and try not to worry about short-term market fluctuations.

Another round of new ETFs
The parade of new exchange-traded funds continues swiftly. Barclays' (NYSE:BCS) Global Investors unit announced that it's hard at work on a series of brand-new ETFs as a part of the firm's continued bid to become a larger player in the 401(k) business. These funds would focus on areas such as natural gas, private equity, and infrastructure, while others will invest in foreign stocks, fixed income, and other alternative investments. Barclays has already filed papers with the SEC to roll out three ETFs based on municipal bonds, the first of their kind. It appears that there's no end in sight to the rollout of new ETFs to meet anticipated investor demand.

Exchange-traded funds can be a very useful tool for most investors. They provide inexpensive access to the market and offer trading flexibility that traditional mutual funds do not. But few investors actually need most of the new ETFs being offered; most are best off sticking to broad-market ETFs rather than funds focused on narrow market segments like oil, timber, or construction. Leave these specialty funds to Wall Street's gamblers. Some of Barclays' upcoming funds may be appropriate for investors; others probably won't be. Just remember to think broadly before buying, and you'll avoid being trapped by inappropriate investments.

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Fool contributor Amanda Kish lives in Rochester, N.Y., and does not own shares of any of the companies or funds mentioned herein. The Fool's disclosure policy always takes the long view.