Funds that buy stocks and bonds absorbed $1.24 billion in the week ending April 6. Equity funds, with seven times more in assets, took in $2.44 billion. Bond funds got $5.22 billion, data from Washington-based ICI show.

Investors have added $604 billion to debt funds since March 2009, compared with $2.6 billion for equities, according to ICI data through March 31. The S&P 500 has gained 104% including dividends in the past 25 months, while Barclays Capital's index of U.S. investment-grade corporate bonds returned 35%.

"People have been traumatized by equities in the U.S. and have started to look for a more balanced approach," said Adrian Zuercher, who helps oversee $150 billion in asset allocation strategies at Credit Suisse in Zurich. "Given all the money that has gone into government bonds, sooner or later they have to bring back some money into the equity segment."

Mutual-Fund Industry

Hybrids vary from balanced funds, which maintain a specific mix of equities and bonds, to flexible funds that can put any portion of their assets in stocks, debt or money-market securities. They make up 6.5% of the $12.1 trillion U.S. mutual fund industry, according to ICI.

The average hybrid allocates 60% to stocks, 34% to bonds and the rest to cash, options, warrants and other securities, according to December data from the Washington-based trade group. That compares with 58% in equities and 36% in debt the previous year.

St. Denis J. Villere & Co.'s $83 million Villere Balanced Fund, created in 1999, has returned 30% in the past 12 months, about three times more than the S&P 500, making it the top performer among 225 balanced U.S. equity funds tracked by Bloomberg. The biggest holding as of March 31 was 3D Systems Corp., a maker of imaging systems in Rock Hill, South Carolina, that has risen more than 230% in the past year.

'Peace of Mind'

"A lot of clients, having gone through the dark days of '08 and '09, want peace of mind,'' said George Young, co-owner with three family members of the century-old asset manager, which oversees about $1.5 billion. At the same time, ''they realize now that equities are a viable investment,'' he said.

Villere started buying more stocks and high-yield bonds in April 2009 just after equity indexes bottomed, boosting share holdings from a low of 60% to as high as 68%, said Young, who helps oversee the balanced fund. Its assets have grown from about $50 million in August 2010, mostly through gains in asset prices.