In step with entertainment columnists making their predictions for 2005, Morningstar Analyst Gregg Wolper has a few of his own:

1. The biggest news of 2005 could be a new, red-hot sector that puts the media and investors into a frenzy. "Institutions and ordinary investors will pour money into funds targeting that sector," Wolper writes. "If an exchange-traded fund focusing on that area doesn't already exist, one will be created."

2. Congress will come back to the table with a host of new mutual fund regulations. More hearings will be held. But in the end, not much will change.

3. In Japan, the sun will rise - and fall - While a third economic rally in Japan in recent years floundered once again in 2004, it will succeed in the beginning of the new year, attracting money to Japan equity funds, but sputter once more.

4. More funds will cut their expense ratios - but Morningstar will point out that they are still too high.

5. At least one fund company will try to bury small or poorly performing funds by merging them into other, unrelated funds. The SEC will fail to notice this because the funds will claim the larger asset base will result in lower fees. In point of fact, the fund fees will come down only a scant amount.

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