2019 Mutual Fund Guide: Profit from These Trends

Change is inevitable, as Benjamin Disraeli, the 19th-century British prime minister, once said. He was talking about society. But it's also true in the nearly $16 trillion world of mutual funds--and we're not just talking about recent gyrations in the financial markets. Take the past year. For the first time in history, mom-and-pop investors can invest in free mutual funds. The four funds, all Fidelity index funds, charge no annual fees. "I used to say expense ratios can't get to zero," says Sean Collins, chief economist at the Investment Company Institute, "and I've had to change my tune."

The drop in expense ratios is just one of many shifts under way in the mutual fund industry. Other trends include lower investment minimums, reduced sales loads, an explosion of quantitative strategies, and the ongoing flow of assets out of actively managed funds and into index funds. All told, the mutual fund world has become extremely competitive. Says Brian Hogan, head of Fidelity's investment product solutions and innovation division: "The pace of change is accelerating.