Although large-cap funds have outperformed small-cap funds for three straight months now, investors appear to be wary of moving into them, instead favoring multi-cap funds, The Wall Street Journal reports. The volatility of the stock market, inflation fears and the prospect of slowing economic growth are what has put investors on edge.

In May, multi-cap funds took in $8.5 billion, while small-cap funds took in $300 million and large-caps had net outflows of $6.7 billion.

"People are not very confident about making a rifle-shot choice," said Don Cassidy, senior research analyst at Lipper. "They are confused and cautious."

Daniel Morgan, portfolio manager at Synovus Investment Advisors, agreed: "What you are seeing is standard investor behavior. They aren't quite sure who is right and what's going to happen. They are just trying to be diversified and cover all these groups."

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