While the stock market racked up some pretty impressive gains in the first quarter of the year, equities have stumbled in recent weeks. As fears over the eurozone situation and slowing job creation here at home have spooked the market, stocks have taken a slide over the past six weeks. And while investors are generally being more cautious with their money, they appear to be favoring certain money managers.

According to Morningstar data, fund giants Vanguard Group and Pimco took in more than half of all investor inflows in the month of April. Out of a total of $20.8 billion in net inflows that found its way into mutual funds last month, Vanguard captured a net $7.5 billion while Pimco netted $6.4 billion. But is this a smart move on the part of investors? And is all that money being funneled into smart fund choices?

Follow the leader
Vanguard has been a stalwart in the fund industry for many years, and for good reason -- the shop's focus on fundholder-friendliness and low costs has made it a favorite with many investors. And while Vanguard offers a number of first-rate, low-fee actively managed funds, index funds, and exchange-traded funds, there are a few offerings that investors might want to consider first if they are among the many stuffing their money into Vanguard's coffers.

Active management advocates should take a second look at Vanguard Dividend Growth (VDIGX). This fund invests in high-quality companies with healthy and growing dividend payouts. The fund is well diversified, has low turnover, and comes with a super-low 0.31% price tag. Over the most recent decade, the fund has posted an annualized 5.5% return, besting 94% of all large-cap blend funds. If economic turmoil overseas and at home continues to take center stage, financially stable industry leaders like the names in this fund should do well, making Dividend Growth an ideal pick for uncertain times.

However, most of the money flowing into fund shops in recent months has been heading into ETFs as investors have become disillusioned with active management's recent results. Vanguard acolytes are in luck, as the firm offers some of the best ETFs in the business.

For broad domestic stock market coverage, the Vanguard Total Stock Market ETF (NYSE: VTI) will get the job done for an amazingly low 0.06% price of admission. At 0.05% and 0.16%, respectively, the Vanguard S&P 500 ETF (NYSE: VOO) and Vanguard Small-Cap ETF (NYSE: VB) offer more exclusive coverage of the large-cap or small-cap market segments. Those who want one-stop foreign investing should think about buying Vanguard Total International Stock Index ETF (NYSE: VXUS), which covers both developed and emerging countries for just 0.18% in expenses. Or if you want to home in on emerging markets, the Vanguard MSCI Emerging Markets ETF (NYSE: VWO) is one of the cheapest emerging plays around, with its 0.20% price point. Whatever your needs, Vanguard likely has an inexpensive exchange-traded fund to fit the bill.

Piling it on
I'm not quite as sanguine about Pimco's large inflows last month, only because the vast majority of those dollars seem destined for one place -- the flagship Pimco Total Return Fund (PTTAX). It's not hard to understand the appeal of this fund. Managed by bond guru Bill Gross, Pimco Total Return is one of the most successful bond funds around. In the past 15 years, the fund has cranked out an annualized 7% return, better than 89% of all intermediate-term bond funds.

But while it doesn't appear that Gross is facing capacity constraints at present, the fund can't keep on growing at its current rate forever. At last glance, Total Return had more than $258 billion under its roof, making it the single largest mutual fund in existence today. By way of comparison, the second largest fund, Vanguard Total Stock Market Index (VTSMX), has just under $170 billion in net assets.

While I think Pimco Total Return is a fantastic choice for any bond investor, folks need to be careful about chasing performance. The fund may not always look as good as it does now. Just because everyone else is giving their money to Bill Gross to manage doesn't mean you have to as well! There are a fair number of other well-diversified bond funds out there that could do a nice job for you as well, including Dodge & Cox Income (DODIX) or DoubleLine Total Return Bond (DLTNX). Funds like these are a lot more nimble and have more room to maneuver, thanks to their smaller asset bases.

Fear rules the day
One thing that's troubling, although not surprising, is that April's fund data shows that investors are going back to bonds. The same Morningstar data from April indicates that investors pulled a net $9.3 billion from domestic stock funds while adding a whopping $19.3 billion to taxable and municipal bond funds.

Given that a fair number of investors are still rattled from the fallout from the recent financial crisis, it's understandable that folks are more risk-averse than usual. But keep in mind that bonds have likely run about as far as they can this market cycle and are going to get hit hard when rates start heading back up. And while bonds are great, they won't offer you the long-term return potential you need to make your money grow over time -- only stocks can do that.

While Vanguard and Pimco offer some great fund choices for investors, you need to make sure you pick the right funds for your portfolio and for your risk tolerance. And don't forget to diversify among other fund shops elsewhere in your portfolio -- you don't want to leave all your money with a single manager. Big fund shops like these can be an important part of your portfolio, but they should be just one part of an overall diversified fund allocation.

No matter which fund shop you like to invest in, odds are you're going to need a lot more than a few great fund picks to ensure that your retirement is secure. Be sure to check out our newest special free report which highlights the shocking truth about your retirement. Don't miss this chance to grab your free copy of this can't-miss report today!