Financial Research Corp. researchers predict that mutual fund net sales will grow 2% annually and reach a total of $340 billion by 2012.

Other financial products such as exchange-traded funds, managed accounts and hedge funds will experience double-digit sales increases annually, although they will be starting from much smaller asset bases, according to the researchers at FRC, Boston.

The researchers also project an increase in sales through intermediary distribution channels at the expense of the direct-to-investor channel. Gross sales through intermediary channels such as broker-dealers, banks, insurance companies and registered investment advisors will represent 61% of sales by 2012, up from 50% in 1999, the researchers predict.

The researchers estimate mutual fund assets held by independent brokers will reach $830 billion by 2012.

Net sales and assets in mutual funds in the bank channel also should show strong growth, the researchers say.