Companies that manage money for large institutional investors have begun to create mutual fund portfolios for individuals. Now the little guy can get the expertise once available only to large corporate pension plans.

So goes the slick marketing pitch. Should you buy into it?

There are a couple of reasons why it might actually make sense to put some of your money with a manager who's pension-fund oriented. Investors looking for stability, low cost structures, and solid, middle-of-the-road performance might find satisfaction in a fund run by a pension-fund manager.

Why? Well, partly because folks who oversee pension funds achieve more stability in their returns than those who run mutual funds that expand and contract with the mood swings of the investing herd. And large pension plans typically get their assets managed for less than 0.5 percent of the money under management; compare this to 1 percent or more for most equity funds. Some, but not all, institutional managers charge lower fees to retail clients.

Most pension-fund managers develop an expertise by which they are known in the institutional world. Their retail mutual funds should reflect this focus - a nice change from the typical mutual fund family's we-offer-everything philosophy.

There are a couple of mutual funds run by pension-fund managers that retail investors might consider. Clipper Fund, managed by Pacific Financial Research (310-247-3939) in Beverly Hills, California, is one - minimum investment is $5,000. PFR currently manages around $2.5 billion worth of institutional assets, specializing in finding undervalued stocks with what might be called a contrarian eye. The Clipper Fund, PFR's largest retail portfolio, has shown the kind of stability that is prized in the institutional world. Clipper has never ranked in the bottom 25 percent of all growth funds and spent only one year in the bottom third. It has gained an average of 13 percent annually during the past four years. Clipper's expenses are higher than those of pension funds but about average for mutual funds, ranging from 1.12 percent to 1.17 percent of assets since 1989.

Another institutional manager turned retailer is Dimensional Fund Advisors (310-395-8005) in Santa Monica, California. Retail investors can buy shares in DFA mutual funds through financial advisors who can pool the assets of several clients to reach DFA's $50,000 minimum investment. DFA runs about $10 billion; its forte is specialized indexes. For instance, one of DFA's 16 retail funds, the U.S. 9-10 Small Portfolio, owns every NYSE-listed company that falls in the lowest 10 percent of market capitalization, plus Nasdaq and American Stock Exchange companies that are just as small or smaller. DFA's 6-10 Small Portfolio buys stocks in the bottom half of market capitalization.

Buying every stock that meets narrow criteria like these saddles investors with some losers, but it also ensures that portfolios mirror the performance of the larger group as a whole. This is not always achieved in traditional mutual funds. For instance, the median market capitalization of stocks in the DFA 9-10 portfolio is $66 million - truly small capitalization. Compare this to the average in many other so-called small-cap funds: hundreds of millions, even billions of dollars.

Another benefit of DFA funds: Like other index funds, their expenses are low, less than 0.7 percent of assets. Most small-cap funds run up expenses of 1.3 percent a year and higher. DFA offers international funds in stocks and bonds; single-country small-cap funds in Japan, the U.K., and Germany; small- and large-cap value portfolios invested in U.S. stocks; and three slices of the domestic bond pie. Where else can you buy a portfolio of small Japanese stocks for expenses that run to only 0.88 percent of assets a year?

Be cautioned: Such specialized portfolios can still be volatile. In 1987, for example, when U.S. investors were reeling from the market crash, the DFA Japanese Small Company portfolio showed a total return of 87.47 percent. Later, when the Japanese market tanked, the fund went with it, recording losses of 33.3 percent and 26.1 percent in 1990 and 1992, respectively, placing it at the bottom of the rankings made by Morningstar, the mutual fund - rating service, for each of those years.