Despite the market turmoil caused by the subprime crisis, most mutual funds are in the black, although their returns are not as strong as previous years, the Boston Globe reports. In fact, only sector funds that concentrate on banks and real estate are taking a hit.

International stock funds are up 8.3% year to date and U.S. stock funds have risen 4.6%. As a result, most financial planners are still recommending investors to stick with a diversified mutual fund portfolio.

“We don’t do anything defensively when the market’s like this, even when clients call kind of panicked,” said Cheryl Costa, a principal adviser at Family Financial Architects in Natick, Mass.

Mutual funds are also benefiting from investors pulling their money out of hedge funds and private equity, said Peter Martin, president of Natixis Global Associatess.

Still, U.S. stock funds rose 13% in 2004, 8% in 2005 and 13% once again last year.

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