Kiplinger

Mutual Fund Rankings, 2018

Mutual fund investors prospered in 2017 as the U.S. bull market charged into its ninth year with a stunning rally. Standard & Poor's 500-stock index returned nearly 22%. What's more stunning is that the U.S. rally paled in comparison with stock gains overseas. For the first time in a decade, the world's developed economies grew at the same time, along with many emerging economies.

Investors who ventured into overseas funds were rewarded. Europe's markets benefited from strength in manufacturing, low unemployment and rising corporate profits. In Japan, economic and regulatory reforms helped push stocks to a 26-year high. The MSCI EAFE index, which tracks stocks in developed markets, racked up a 25% gain in 2017, a sharp improvement from 2016's puny 1% return. And the MSCI Emerging Markets index soared 37%, led by strong gains in Chile, China, India and Poland.

In the U.S., investor optimism hinged on hopes for lower corporate tax rates, which were signed into law by year-end. Yet small companies, which have typically paid taxes at higher

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