MarketWatch columnist Chuck Jaffe welcomes 2012 with his eight-point fearless forecast for the mutual fund industry. But none of the predictions are likely to be fresh to mutual fund industry insiders.

Jaffe expects the industry to hype three-year returns as 2008's lousy returns fall off the radar.

He looks for marketers to sell low-volatility and that a fund designed to protect investors from risk will be crushed.

"At some point, a small fund will find itself upside-down after a market event (maybe a fresh euro-zone scare?) and feel the sudden crush that investors are trying to avoid," he writes.

He predicts a big legal battle as part of the SEC's "fees-and-expenses war" dating to 2010.

He expects that Fidelity [profile] will "jump with both feet into the EFT space." Is this the trendy prediction for 2012?

Another safe call is that money fund sponsors will see another wave of fund closings and that the SEC will work hard to finish the 12b-1 reform so, as Jaffe puts it, "they will do something cosmic to appease politicians in an election year, but mostly they want to 'finish' the job so that they don't have t bother with it again."

His most quirky prediction is that some outfit will open a "trending" fund. What that is, even the MFWire is unsure.  

Edited by: HFD


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