NEW YORK - The roar the Dow Jones industrial average has unleashed in recent months is being heard by some as the sound of large capitalization stocks reasserting themselves. It appears, though, that many mutual fund investors aren't listening or at least aren't rushing into mutual funds that invest in these companies.

After years under the thumb of small caps, the ascension of large cap stocks has no doubt made some investors swoon. The Dow, made up 30 blue chip stocks like General Electric Co. and Caterpillar Inc., has been on a tear in October, logging triple digit point gains in each of the first three weeks of the month and passing 12,100 for the first time.

While many mutual fund managers see a shift toward large cap funds in the offing, investors aren't running away from funds comprising small cap stocks, which have been strong for years.

Estimates from Lipper Inc., which tracks funds, show that investors pulled more money — about $4.9 billion — from large cap funds during a difficult September on Wall Street than from any other type of fund. Small cap funds, by comparison, saw outflows of only $1 billion. Investors put about $5.4 billion into multicap funds.

"Large caps probably have a better road ahead," said Tom Roseen, an analyst at Lipper. "Large caps were just kind of languishing," he said of the past four years when small caps held many investors' attention.

Roseen expects that the performance of some large cap funds this year will draw increased attention. Through late last week, large cap value funds showed a 12.81 percent return for the year, while small cap value funds turned in a slightly lower 12.47 percent return.

Among growth funds, small cap funds still lead, with a 7.03 percent return for the year compared with a 2.3 percent return for large cap growth funds.

"The (large cap) funds are doing well but the money's not going there," said Roseen. "We still have the reluctancy to give up on small caps. That could be a little performance-chasing."

Despite an as yet tepid response from some investors, observers say large cap funds could be due for an injection of cash.

"People are going to get their feet wet if they want to come back to the marketplace so they will buy more conservative funds," said Neil Hennessy, portfolio manager of the Hennessy Cornerstone Value fund, in making the case for large-cap stocks. Large caps are in many cases well-known, stable companies that pay dividends.

"Right now the Dow is still undervalued by about 4 percent," Hennessy said. He contends that historically low interest rates, stable inflation and low unemployment will keep a slowing economy strong enough to fuel a further run-up in blue chip stocks.

John Coumarianos, a mutual fund analyst at fund-tracker Morningstar Inc., said smart investors moving into large cap stocks and funds aren't chasing the Dow's performance or blithely turning away from small caps but are instead hunting individual bargains.

"The investors we like the best just tend to turn over one rock at a time. On a more fundamental basis, these businesses look like they present the most compelling bargains."

"I think it's a really good time for investors to take a look at their portfolios and see that they're not unduly underweight in large caps," Coumarianos said.

Coumarianos said funds like the Yacktman fund, which is up 12.82 percent this year, and the Oakmark fund, with its 13.04 percent increase for the year-to-date, are proving that large cap value funds can be wise investments.

He says funds like Yacktman are well run because they have snapped up large cap stocks that were bargains in recent years when investor attention was elsewhere.

"He's actually got a number of these steady Eddie growth stocks in his portfolio," Coumarianos said of Don Yacktman, who runs the eponymous fund.

Stephen Lieber, who, along with his son runs the Alpine Dynamic Balance Fund, sees a move toward larger cap stocks as investors look to shore up their holdings as the economy slows.

"This is a somewhat defensive type of move. There is an implicit insurance premium. It's not inappropriate based on historical trends," Lieber said.

He believes that even if prices of large cap stocks rise further investors will be drawn to them and the mutual funds that invest in these stocks because of the safety associated with large, stable companies.

"You pay a higher premium for well-positioned companies that are likely to play a better role in that economy."

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