Sensing that investors are still worried about market volatility and a reversal of this year’s rally, fund companies are increasingly allowing their managers to hold larger amounts of cash, or offering tactical, dynamic, absolute-return or other types of funds that have the flexibility to reverse course.

And these funds are selling neck-to-neck with equity funds, with investors placing $4.1 billion into allocation funds in the first nine months of the year, compared with $4.3 billion into stock funds, according to Morningstar. Of course, this pales in comparison with the $213 billion invested in bond funds in this period of time.

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