[11494]
December 27, 1999
TO: BOARD OF GOVERNORS No. 77-99
RE: ECONOMIES OF SCALE IN EQUITY MUTUAL FUNDS
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The Institute has just released the latest in its series of research on trends in mutual fund
fees and expenses. The enclosed study, Operating Expense Ratios, Assets and Economies of Scale in
Equity Mutual Funds, finds that operating expense ratios generally decline with asset growth
and that large funds generally have significantly lower operating expense ratios than small
funds.
The news release, which is being distributed to media across the country, and an
overview of key findings are also enclosed. Please feel free to distribute this information to
appropriate members of your firm. Should you have any questions regarding the study, please
contact John Rea at 202/326-5910.
Matthew P. Fink
President
Enclosures