Although the market was hammered last week by subprime loans, individual mutual funds aren't likely to have much exposure to the volatile sector. Most sub-prime lenders are small-cap companies, and, as such, funds won't have large amounts of cash invested in them. In addition, most mutual funds are diversified.

"Diversity is what saves you from an event like this," Jeff Tjornehoj, senior analyst with Lipper, told the Associated Press. "Some of the worst offenders among subprime lenders were generally not considered sizable holdings."

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.