Mutual funds in general experienced tremendous growth in 1979, with industry assets increasing to $95 billion from $56 billion a year ago, but investors shield away from funds that invest in common stocks, according to a mutual fund association.

While money flowed out of savings and loan institutions and credit unions, a net amount of $33 billion flowed into mutual funds, including money market and municipal bond funds, according to the Investment Company Institute. At the same time, the absolute number of shareholders in mutual funds also increased, the institute reported.

"At times of high rates of interest, money just comes out of the woodwork," said Reg Green, a spokesman for the institute. Both high interest rates and liquidity attracted investors, he said.

However, funds that invest in common stock continued out of favor with investors, in spite of substantial growth in the value of assests, according to David Silver, president of the Institute.

"It was not an exceptional year across the board for common stock funds," said Harry Lister, vice president of the Washington Mutual Investment Fund, a fund established about 27 years ago by Johnston Lemon & Co. Inc. and managed by the Capital Research & Management Corp.

Lister said redemptions "have been running at a fair pace but are not alarming," with Washington Mutual outperforming common stock funds in general. "There are indications that the figure on redemptions (nationally) will be about 16 percent of net assets. Ours has been about 11 percent of net assets," he said.

Money market funds that have attracted investment that might have previously gone into savings and loans and credit unions, have also attracted funds away from common stock funds, said Lister.

According to the Institute, however, common stock funds have performed well in major respects. "This year alone investors who bought mutual funds which invest in common stocks have seen a growth in the value of their holdings on average of over 20 percent," said Silver, Common stock funds continue to be "one of few investments available to those with moderate incomes which have stayed ahead of this year's record inflation rates," said Silver.