ICI Economist Reports that 'Total Shareholder Cost' of Investing In 
          Stock Mutual Funds Has Declined 45% Since 1980  

Report Tackles 'Multiple Misconceptions' About Mutual Fund Fees;
          Finds Investor Preference for Lower Cost Funds Continuing

    WASHINGTON, Feb. 18 /PRNewswire/ -- "The actual costs borne by average
stock mutual fund shareholders have dropped 45% since 1980," Investment
Company Institute Deputy Chief Economist Brian Reid reported today.
    Previous ICI studies also documented substantial declines in "total
shareholder costs," a comprehensive methodology for evaluating mutual fund
costs that was developed by Harvard Business School Professor Peter Tufano and
Babson College Professor Erik Sirri.  Reid's report updates this research
through year-end 2002.  "The long-term downward trend in what it costs
shareholders to invest in mutual funds is consistent and unmistakable," Reid
said.
    Institute Chief Economist John Rea said that "the total shareholder cost
approach to assessing mutual fund fee trends has been favorably received by
government officials and many independent experts."  Rea suggested that the
reason the methodology has won acceptance is because "it measures both sales
loads and annual fees, not just one or the other."  Rea pointed out that in
the SEC's January 2001 fee study, the SEC staff specifically warned that
observers could easily draw misleading conclusions about fund fee trends if
they failed to account for "significant changes" in how investors paid sales
charges.
    The fact that the downward trend in shareholder's total cost of investing
in mutual funds "persisted through the three-year bear market is particularly
gratifying," Rea added.
    Reid's report presents several other important findings about mutual fund
fees.

    *    The study reports that the interest of mutual fund shareholders in
          lower cost funds continues.  With respect to stock mutual funds,
          Reid found that "60 percent of shareholder assets are invested in
          funds with total expense ratios under 1.00 percent."

    *    Reid pointed out that "confusion about a typical shareholders' costs
          persists, one of multiple misconceptions about mutual fund fees."
          Reid said confusion results from the mistaken assumption that the
          simple average of what mutual fund's charge is the same as what the
          average investor pays.  Reid said there is a wide gap between the
          two.  "The data on this point is overwhelming; the typical mutual
          fund investor pays much, much less in fund fees than the typical
          fund charges."

    *    In discussing the new report, Reid noted that studies by the ICI,
          SEC and GAO all independently confirmed that mutual fund fees
          reflect cost savings achieved through economies of scale.  In
          particular, "each study found that the overwhelming majority of
          funds that experience significant growth reduce their fees, with the
          sharpest reductions at the funds that grew the most."