Individuals Continue to Shift Away From Stocks : Securities: An industry group says mutual funds and private pensions are taking a bigger bite of the market.

NEW YORK —  Individual investors are continuing to shift their ownership of corporate America from common stocks to mutual funds and pensions.

Meanwhile, foreign investment in the United States slowed last year, but not as sharply as first thought, the Commerce Department said Wednesday.

American individual investors held 45.8% of U.S. stocks at the end of the first quarter, or a total of $2.7 trillion, according to the Securities Industry Assn., a Wall Street trade group. Last year, individuals owned 47.1% of equities. In 1965, they owned 84% of U.S. stocks.

The SIA, citing information provided by the Federal Reserve Board, said private pension funds and mutual funds are taking a growing bite of the market and owned 54.2% of the $4.96 trillion in U.S. stocks at the end of 1993’s first quarter.

“This could be a reflection of the general perception by individuals that they are not playing on an even playing field with an institutional investor,” said Raymond Mason, chairman, president and chief executive of Legg Mason Inc., a Baltimore brokerage.

“A lot of people are moving to mutual funds from individual stocks,” Mason said. “The chances of getting in a stock that’s going to beat them up is substantially (more) than in a mutual fund, where risk is reduced.”

Meanwhile, foreign investors pumped just $2.4 billion into the United States in 1992, down from $11.5 billion in 1991, $45.1 billion in 1990 and a high of $67.9 billion in 1989.

In March, the Commerce Department reported that direct investment by foreigners was a negative $3.9 billion, indicating that they actually liquidated U.S. holdings for the first time in decades.

But a department official, commenting on the release of a new in-house study of foreign direct investment, said the 1992 figure has been revised to a positive $2.4 billion.

In the report, the department attributed the early-’90s slowdown in foreign investment to the recession and slow recovery in the United States, which made investment less attractive.

The decline in stock and real estate values in Japan crimped the ability of Japanese banks to invest in the United States. And the reunification of Germany sharply raised the demand for investment funds, cutting the amount available for investing abroad.