Five Key Trends for Mutual Fund Marketers in 2025

With 2025 underway, the mutual fund industry is at a crossroads. Outflows and the rise of passive vehicles like ETFs continue to pressure margins. There are bright spots, though, in areas like active bond funds, money market funds, and retirement account funds that represent opportunities for asset managers.

That was our takeaway, at least, after listening to the Hints of Optimism Webinar: 2025 Mutual Fund Outlook hosted by David Cohne, Mutual Funds & Active Analyst at Bloomberg Intelligence. It was a valuable webinar full of insights into the most important trends facing mutual funds today.

But what do these trends mean for marketing professionals? How can firms adapt their content and brand awareness strategies to not only retain but also attract clients in an increasingly competitive environment?

Below are five trends mutual fund marketers should focus on in 2025.

1. Highlight active bond funds as a differentiator

Key insights: Cohne spoke about how active bond mutual funds have outperformed their benchmarks at a higher rate than equity funds, driven by strong manager performance and elevated interest rates.

“Bond mutual fund managers tend to perform better than equity managers because many benchmarks cannot hold specific securities, allowing these managers to take advantage of opportunities,” Cohne said.

Looking at 2024 flows through October, bond funds had nearly $260 billion in inflows—well ahead of the prior year. This was driven by strong performance, with about 75% of active fixed income mutual fund managers outperforming their benchmarks, according to Bloomberg data.

Cohne also noted that active bond funds face less competition from ETFs because the tax efficiency of ETFs isn’t as relevant for income-focused strategies compared with equity strategies focused on capital gains.

Marketing takeaways:

• Focus your messaging on the advantages of active bond fund management, particularly its ability to outperform benchmarks in challenging markets and during periods of elevated rates
• Create educational content (e.g., whitepapers, webinars) that explains how active bond managers navigate interest rate shifts and market volatility
• Highlight case studies or manager profiles that demonstrate strong performance and process to build credibility

2. Reframe the narrative around U.S. large-cap equity funds

Key insights: Large-cap funds face outflows and competition from low-cost ETFs, but large-cap funds’ asset base continues to grow due to positive market performance. They remain a substantial revenue generator for fund firms given the popularity of large-cap U.S. stocks. Of course, how long a rising market remains a tailwind is anyone’s guess.

Still, active large-cap mutual funds held about $3.2 trillion in October 2024, with assets rising on market appreciation despite outflows, according to Bloomberg Intelligence. Also, only about 35% of large-cap blend managers beat their benchmarks through October 2024.

Cohne noted that large-cap managers face plenty of competition, while there is a lot of public information available on the largest stocks. The strong performance of mega-cap stocks, particularly the Magnificent 7, has made it challenging for active managers to keep pace with market-cap-weighted benchmarks like the S&P 500, especially those managing diversified portfolios.

Marketing takeaways:

• Shift focus from short-term outflows to the long-term benefits of large-cap funds as a foundation for diversified portfolios
• Use content marketing to position large-cap funds as complementary to passive ETF strategies, emphasizing stability and historical performance
• Leverage data-driven storytelling to build trust with investors, showcasing the role of large-cap funds in weathering market cycles
• Present strategies for investing in a highly concentrated U.S. large-cap equity market

3. Emphasize money market funds for safe havens and income

Key insights: Money market funds remain attractive to investors due to elevated yields and perceived safety, with inflows staying strong in 2024 despite Federal Reserve rate cuts, according to Bloomberg Intelligence. In short, yields in the 5% range are compelling for many investors.

Through October 2024, money market fund flows were just behind the record pace of 2023, according to Bloomberg Intelligence. U.S. money market funds gathered cumulative inflows of $1.2 trillion in 2023, the largest on record, according to the Office of Financial Research, an independent bureau within the U.S. Department of the Treasury.

Marketing takeaways:

• Position money market funds as the cornerstone of liquidity strategies, particularly in periods of economic uncertainty
• Use targeted campaigns to reach investors seeking safety and income, emphasizing simplicity and reliability
• Offer tools like calculators or guides to help advisors and clients understand the role of money market funds in a portfolio

4. Retirement funds as a growth platform

Key insights: Mutual funds continue to dominate retirement accounts like 401(k)s and IRAs. ETFs are less of a threat in this market due to tax and administrative factors. Meanwhile, target-date mutual funds remain a popular option in retirement accounts. Mutual funds still hold the majority of total 401(k) assets at about $5 trillion, according to Bloomberg Intelligence. This may not change anytime soon.

Marketing takeaways:

• Collaborate with plan sponsors to position your funds as go-to options for retirement plans, leveraging their proven track record and regulatory compliance
• Highlight the advantages of mutual funds over other vehicles like collective investment trusts (CITs), focusing on accessibility and transparency
• Build marketing campaigns around life-stage investment strategies, emphasizing the role of target-date funds in retirement planning

5. Seek opportunities in niche strategies

Key insights: Mid-tier and smaller fund families are gaining ground by focusing on niche strategies and delivering strong performance, according to Bloomberg Intelligence. Mid-tier firms can build a following if they’re known for outperformance in specific asset classes and strategies.

Marketing takeaways:

• Showcase your firm’s niche expertise through thought leadership, including blogs, videos, and events featuring portfolio managers
• Differentiate your offerings by emphasizing a focused, personalized approach compared to larger, more generalized competitors
• Build campaigns that target specific investor segments interested in high-performing, specialized strategies

We can help build a forward-looking marketing strategy

The insights from this year’s mutual fund trends are clear. To protect and build their mutual fund asset bases, asset managers must focus on performance differentiation, emphasize long-term advantages, and tailor their strategies to meet evolving client needs. By aligning your marketing efforts with these trends, you can position your firm for success in 2025 and beyond.

Wentworth Financial Communications develops content for leading firms across the asset management industry. If you would like to chat about how to apply these mutual fund trends to your marketing strategy, please contact us.

About the Author John Spence leads the ETF content marketing practice at Wentworth Financial Communications. He collaborates with a team of writers and editors at Wentworth to help professionals across the financial services industry build their brands by creating investment-grade infographics, videos, email campaigns, blog posts, social media content, white papers, bylined articles, newsletters, and other forms of content marketing.