Fund flows in July offered a mixed bag of conclusions. So be prepared for a lot of questions from clients.

If your clients look at such numbers, they’ll see that flows into U.S. open-end funds increased slightly overall to $14.1 billion versus $13.5 billion in June, according to data released this week by Morningstar Inc. But within that 4.4% increase were mixed messages regarding investors’ appetite toward risk.

For instance, equity funds lost $12.4 billion while taxable bonds picked up $22.3 billion for the month, and inflows into muni bonds nearly doubled in month-over-month comparisons to $3.9 billion.

At a glance, all of these moves from equity to fixed-income would suggest that risk aversion is a dominant theme, according to Morningstar. But the fund tracker then notes that a closer look shows that balanced funds — considered a moderate-allocation category — took the “brunt of this development with nearly $2.1 billion in outflows.”

And in a broader trend that suggests that investors may not be avoiding risk, alternatives and commodity funds increased in assets. Alternatives took in about $1.7 billion while commodity funds increased $923 million.

But the most interesting aspect of the current fund flows came from the increase in emerging market funds. In July, diversified emerging market stock funds took in nearly $2 billion, while the three major foreign–stock categories had a combined outflow of $624 million. It’s not clear how much of the money move is a real structural shift and how much is simply performance chasing.

But because of the emerging markets’ lower debt-to-GDP ratios, they may be viewed by some as safe havens from the developed countries, according to Morningtar. If so, that’s a “stunning reversal in investor attitude,” the research firm said. Either way, it appears to be a “re-rating of risks in the emerging markets,” says Kevin McDevitt, editorial director of Morningstar.

We have a feature story in the current issue of On Wall Street that helps quantify this. Emerging market economies’ debt-to-GDP ratio averages about 40%, while the developed world ranges from 80% to 120%. And with domestic consumer demand increasing from a growing middle class, those emerging countries will continue to improve in the coming years. The conclusion: In today’s low-interest rate environment, money will find the growth and yield it always seeks more and more from the emerging markets.

One final twist: that money pulled from equity mutual funds wasn’t totally removed from the stock market. About $6.8 billion of it was plowed into ETFs. So investors were at least partly trying to mitigate “manager risk” more than move away from equities in general.

So your clients come to you and ask about risk. They’ve read various things about fund flows, including the surprising idea that emerging markets may actually be safer than the developed world. What do you tell them?

First and foremost, remember that the broad trends that usually appear more concrete and are often summed up in a headline (fund flows are up for the month; investors are fleeing for safety, etc.) are overly general. It may indeed be easier to tease out an over-arching theme most months than it is right now, but the fact is, there are always numerous dynamics at play when it comes to investor sentiment.

So instead of trying to appease clients with talk of such investor sentiment, try to gauge their individual attitude. It really comes down the same thing as usual. Talking to your client and really getting a handle on their risk tolerance, their need for either income or appreciation, and their preferences. And that requires more than simply asking, “Are you risk-averse” and getting a yes or a no. It requires a lot of psychology, and a lot of honest, open and ongoing communication with them.