The mutual fund industry may be going through a period of great scandals and scrutiny, but it isn't keeping investors away from funds in general.

The total amount of money invested in mutual funds has reached a new high: $7.5 trillion. (Yes, trillion.) That's a big number -- about three times the size of America's national budget and enough to buy 37.5 million $200,000 homes. This news was reported last week by the mutual fund industry's trade association, the Investment Company Institute (ICI).

The ICI also noted that in January, stock funds enjoyed a net gain of nearly $44 billion, compared to a net gain of about $500 million for bond funds, and a net outflow of roughly $20 billion from money market funds.

Is there a stock fund mania going on? A Reuters article explains that its probably not a mania, pointing out that 2000 was a good example of a fund bubble, with levels similar to Jan. 2004 for many months in a row. For most of the past year, we've only been experiencing net inflows of between $10 billion and $20 billion.

So why are investors still trusting their money to funds? Well, perhaps in good Foolish fashion, they realize that not all funds are tainted. Some funds are run by talented and admirable managers. (Here are 24 contenders and three particularly fine fund families.)

Investors are also demonstrating faith in American and global enterprise. They are putting their money behind the conviction that companies will keep churning out products and services, which will be bought by consumers, resulting in profits and appreciating values of public companies.

Looking for a mutual fund in which to sock your hard-earned dollars? Consider the glorious index fund, which we've long recommended. It offers a simple way to invest in a broad range of companies and roughly match the overall market's performance. In just a few steps, you can immediately be invested (granted, in small amounts), in companies such as Wal-Mart (NYSE:WMT), General Electric (NYSE:GE), Merck (NYSE:MRK), PepsiCo (NYSE:PEP), and ExxonMobil (NYSE:XOM).

Discuss mutual funds on our Mutual Funds discussion board, where people will be happy to answer your questions. (Free trial available now.) Go on, check it out.

Longtime Fool contributor Selena Maranjian doesn't own shares of any companies mentioned in this article.