A new study by the Spectrem Group finds that, contrary to expectations, the wealthiest U.S. investors are piling into plain old mutual funds.

The report finds that over the past two years, investors worth $5 million or more have doubled the percentage of investable assets allocated to mutual funds from 6% in 2003 to 12%. Over the same period, cash deposits have increased to 13% of investable assets, from 9% in 2003, and investments in individual stocks and bonds have declined to 18% and 8%, respectively, from 20% and 10% in 2003.

“A fascinating phenomenon has emerged among the nation’s wealthiest investors. As financial services firms have worked to provide exciting alternative investments for their wealthiest clients, these investors have chosen to put their money into a far more time-tested vehicle: mutual funds,” said George Walper Jr., president of Spectrem Group.

“This, of course, points to restored confidence in mutual fund companies following the scandals of the recent past. But coupled with the move out of individual stocks and bonds and into cash, this also suggests that Ultra High Net Worth investors are still somewhat gun-shy about accepting greater risk and are managing their market exposure in a conservative way,” Walper added.

Indeed, the percentage of investable assets Ultra High Net Worth investors are allocating to alternative investments — hedge funds, private placements, private equity and venture capital — actually fell to 8% in 2005 from 9% in 2003.

The study was conducted in the spring of 2005, generating 500 responses to a mail survey of households with a net worth of $5 million or more. The data have a margin of error of plus or minus 4.4 percentage points.