Pitched as a safer way for jittery investors to dip their toes into emerging markets, several new hybrid funds have hit the market that invest in both stocks and bonds. But will this new breed of balanced funds live up to its promise?

Now entering the balanced fold are a handful of emerging-market portfolios. In early November, Fidelity launched the $30.4 million Total Emerging Markets Fund (FTEMX), which aims to invest about 60% of its portfolio in stocks and 40% bonds. This fund follows four other hybrid funds to market this year: the $58.6 million Lazard Emerging Markets Multi-Strategy fund (EMMOX), the $20.3 million AllianceBernstein Emerging Markets Multi-Asset Portfolio (ABAEX), the $52.8 million Dreyfus Total Emerging Markets fund (DTMAX), and the $38.5 million PIMCO Emerging Multi-Asset fund (PEAAX). While some have more flexible mandates than others, all aim to shift between asset classes as market conditions change.

Certainly, demand for emerging-market stocks has been high this year, as investors have fled U.S. and European shares. Investors poured $17.5 billion into emerging-market stock funds through the end of November this year, according to data provided by Lipper. Meanwhile, they pulled $79 billion out of U.S. stock funds during that period. On the other hand, investors haven't been flocking to balanced funds -- they've pulled $8.1 billion out of the group so far this year.

These new funds are aimed at drawing more risk-averse investors into these foreign markets. Because the bond portion of the portfolio tends to dampen the volatility of the stock portion, balanced funds tend to generate smaller, but steadier returns than their full octane stock peers, says Mickey Cargile, a managing partner at WNB Private Client Services. "When managed properly, they tend to be a good all-weather fund for the average investor," Cargile says.

The catch: Like all balanced funds, that lower volatility may mean more tepid returns when these foreign stock markets soar, say experts. Other experts also note that the funds' flexible mandates may make it tough for investors to know what they own. "There are so many different moving components you may not be sure what you actually have," says Ron Deutsch, the managing director of Sage Capital Management.

And while the expenses the funds charge are in line with the 1.66% charged by the average emerging-market stock fund, the PIMCO and Dreyfus funds charge upfront sales loads of 5.5% and 5.75%, respectively, and investors could pay up to a 4.25% sales charge for the adviser-sold AllianceBernstein fund. Spokespeople for Dreyfus and PIMCO say their funds have less-expensive share classes that may be available through an investor's 401(k). A spokesman for AllianceBernstein says advisers can choose to add a sales charge, but "the trend has been for advisers not to elect to add loads."

Managers of these new funds say that there are advantages to buying an all-in-one fund. For one thing, these funds can make tactical changes in their asset allocation, moving more money into bonds when markets get choppy and betting more heavily on stocks when markets are gaining. "We would argue that at PIMCO we have more eyes looking at it, and hopefully should be able to do a better job of the asset allocation than the individual could," says Curtis Mewbourne, one of the co-portfolio managers of the PIMCO Emerging Multi-Asset fund.

On top of that, investors who buy two or more individual emerging-market funds might end up over-invested in one country, says Alex Kozhemiakin, a co-portfolio manager of the Dreyfus Total Emerging Markets fund. "We have the ability to ask the question, if we like Russia, what's the best asset class through which to get this exposure?" Kozhemiakin says.