Managing fees is an important part of investing, because they can reduce overall returns. But a new study by the Investment Company Institute, the national association of the American mutual fund industry, says that may not be the problem it used to be. The study found that operating expense ratios generally decline with asset growth and that large funds generally have significantly lower operating expense ratios than small funds.

"The Institute’s research found that 74 percent of a group of large equity mutual funds lowered their operating expense ratios as they grew to exceed $500 million in assets," the ICI said. Such funds represented about three-quarters of all equity fund shareholder accounts and 71 percent of equity fund assets in 1998.

ICI research also found that large equity mutual funds have lower operating expense ratios than small equity funds. Equity funds that exceed $5 billion in assets have average operating expense ratios that are 50 percent lower than equity funds with assets of $250 million or less, the ICI said.

"It is important to note that even though the study examined average asset levels, many factors can cause operating expense ratios to vary from fund to fund.

"These and other findings support the conclusion that a substantial majority of equity fund shareholders appear to have benefited from economies of scale," Institute President Matthew P. Fink said.