Fund shareholders are paying less in many cases, according to newly released data from Lipper Analytics. The study made the rounds of the media, including the Wall Street Journal, on Monday.

Lipper reported 90 fund firms have trimmed their charges in the first quarter of 2005 and that 844 funds cut fees in all of 2004. The 2004 figures show twice as many funds cutting fees as in 2003 and 2002.

The Journal's report noted that as many as 11 fund sponsors agreed to reduce the fees in their fund complexes as parts of settlements with New York State Attorney General Eliot Spitzer. It did not specify how many funds were covered by those settlements.

The paper also failed to note how many funds are covered by Lipper's universe and what proportion of all funds reduced their fees. It did add that the number of funds cutting fees outpaced those raising fees by a six-to-one margin.

Another explanation for the fee cuts, according to the paper, is more pressure for cuts from boards.

"Boards are becoming more active than in the old days," it quoted Jeremy Biggs, vice chairman of money manager Fiduciary Trust Co. International and chairman of the board of the Davis Funds, as saying.

The Davis Funds were one of the groups that reduced fees in 2004.

The paper also noted that the relative lack of growth in the fund industry and falling stock prices since 2000 might be causing some fund complexes to compete on price rather than performance.

The paper uses a quote from Vanguard Chairman John Brennan and Capital Research & Management's Paul Haaga to support that theory.

"We think the client is smart and getting smarter all the time," said Brennan. "In the end, what the investor is interested in is performance. And in my view, there has been an elevation in peoples' awareness of the linkage between fees and performance."

"If your fund is going up 50% or 90%, the fees are lost in the rounding. But in a market that is up single digits, they've become a bigger portion of returns," said Haaga.

The remainder of the WSJ's coverage explores the components of fund fees and ways in which firms are seeking to rein them in.  

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