Mutual fund trends to watch in 2017

Mutual funds are usually a safe investment, and despite a troubled year this was definitely true at the end of 2016. The S&P 500 finished the year up 12%. Diversified stock funds in the United States went up an average of 10.81% after gaining 4.06% in the fourth quarter. With last year and its post-election rally over, it remains to be seen whether 2017 continues strong for mutual funds. To best prepare for the days to come, let’s look at some predictions for the rest of the year and see what new regulations might be enacted.


In general, experts have reason to be cautiously optimistic about trends throughout the stock market. After a steady and even rapid rise throughout the Obama years, trends are expected to level out now they’ve mostly reached or exceeded the levels before the worldwide financial crisis in 2008. 2017 is Donald J. Trump’s first year in office, and investors may become more conservative as they wait and see what sort of effect his policies will have on consumer confidence and business in general. And basic math means since stock prices have raised making stocks more expensive to buy, leading naturally to a lower buy-rate as supply exceeds demand.

The most common reaction from Wall Street despite a turbulent 2016 has been to make like a British wartime propaganda poster and “Keep Calm and Carry On.” Despite ferocious anti-globalist and America-first trade promises, key firms such as Goldman Sachs believe Donald Trump remains a pro-business Republican and will tone down the rhetoric and pass only moderate regulations and tariff hikes while in office. With no other major changes in the global situation thus far in evidence, investors seem willing to stay the course and assume no major financial crisis is imminent rather than risk missing out on more strong quarters like Q4 of 2016.

But 2017 predictions definitely include some risks and pitfalls to watch out for, and even a chance for major mishap in the mutual fund space. Liquidations and mergers may continue to increase in 2017, while possible bad news in commodities might mean a drop in exchange-traded notes. Liquid-alternative funds have risen in popularity over the last few years, but their downsides have been mostly ignored, including a tendency to be not quite as liquid as advertised, with a risk of locking investors into bad deals. Keep in mind that although 2016 saw a big rally, the majority of the year was rough for mutual funds, and 2017 might well be no different, and might lack the rally at the end.

Note also that new regulations by the Securities and Exchange Commission (SEC) may influence growth. New SEC rules for money market mutual funds went into effect in October of 2017, for example.  These changes include new definitions for government and retail funds wherein institutional prime (general purpose) and institutional municipal money market mutual funds must price and transact as “floating” NAVs, able to change liquidity fees in times of unusual stress upon the market.

When planning for whatever the next year brings, companies should be sure contract a financial printing or specialized printing firm for any mutual fund publishing and content management that needs doing. Financial printing companies employ XBRL experts who can help with SEC filings whether one’s business is an IPO or deals in Mergers and Acquisitions in what promises to be, at the very least, an exciting year for all of us.

The investment industry is experiencing upheaval due to the rise of passive funds and robo-advisors. At the same time, the regulatory environment is in major flux. How will the changing conditions affect dealmaking in the sector?

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