After last year's stock meltdown savaged just about every U.S. and international asset class, many investors have concluded that traditional portfolio diversification isn't only discredited, but pure bunk.

In an appeal to these skeptics, some mutual-fund firms have introduced products they claim provide greater protection in bear markets than traditional "balanced funds" that blend stocks and bonds.

Firms say that investors can find comfort in these new funds, knowing that losses will be minimized and risk-awareness increased. But critics point to the higher fees and lack of a track record for some of these portfolios, and question the need to tinker with established investing formulas.

'Quite Skeptical'

"I'm quite skeptical of any fund that says you can have your cake and eat it, too," said Leo Marzen , partner at New York-based wealth manager Bridgewater Advisors Inc.

Among the new-style mutual funds launched this year are so-called absolute-return funds from Putnam Investments, a unit of Great-West Lifeco Inc., and AIM Balanced-Risk Allocation Fund (trading symbol ABRZX), an asset-allocation fund from Invesco Ltd. that invests according to risk-management techniques.

In April, Legg Mason Inc. launched Legg Mason Permal Tactical Allocation Fund (LPTAX), the first mutual fund managed by its Permal "fund-of-hedge funds" affiliate.

Absolute return is a strategy that shoots for positive returns regardless of market conditions. The problem, say critics, is twofold: There isn't much wrong with mainstream investing strategies that a tweaking of asset allocations can't fix, and 2008 was such a bad year that everything suffered.

"A lot of this is just a reminder that really nothing worked last year," said John Coumarianos , a mutual-fund analyst at investment researcher Morningstar Inc. "Treasurys were the only thing that held up."

New and Unproved

Both Putnam and Invesco officials told MarketWatch that their new funds follow risk-managed investment strategies that institutional clients have used for a long time. Legg Mason added that its fund is designed to outperform other balanced offerings.

But regulations prevent firms from disclosing institutional performance, and without a public track record, investors in fact don't know what to expect.

For example, said Ryan Leggio , a Morningstar mutual-fund analyst, "We're not even sure how [AIM Balanced-Risk Allocation] fits in an investor's portfolio. How can they say it's better than traditional balanced funds when they're still offering their own balanced fund?"

Whether to own a balanced fund or an absolute-return fund is a matter of individual preference, said Scott Wolle , manager of the AIM fund. He said the fund could be used as a core holding -- noting that once the fund is available in his firm's retirement plan, he will put all of his retirement savings into it.