With the stock market hovering near record highs, many small investors have been seeking a measure of safety by adding billions of dollars to mutual funds that shift money freely among stocks, bonds and cash, according to data gathered for Money magazine's Small Investor Index.

Because these portfolios, known as asset-allocation funds, spread their holdings over the three major types of investments, they are more stable than pure stock or bond funds. Even so, they have provided solid gains, averaging 11 percent so far this year, compared with 10.8 percent for the average equity fund, according to Lipper Analytical Services.Today, the fact that asset-allocation funds can sharply reduce their stockholdings in response to a market downturn makes them a smart choice for investors who are concerned that stocks are overdue for a fall, financial planners say.

Their high returns, low volatility and flexibility have made asset-allocation funds one of the strongest selling of all fund types. AMG Data Services of Arcata, Calif., reports that these funds took in $893 million in the first three weeks of December, after drawing more than $600 million in both October and November.

At Fidelity Investments, the $8.7 billion Asset Manager fund, up 18.2 percent this year, is now the company's top seller; it nearly doubled in size this year.

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Last week, the Money Small Investor Index, which tracks the typical individuals holdings, rose $160 to $50,982. (The Index has been adjusted to reflect the latest quarterly figures from the Federal Reserve.) Stocks gained $132, while bonds returned $17. Certificates of deposit and money funds added $9, and gold chipped in $1.

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