At a staff briefing last week, GAO agreed to do this work. Background Information Relating to Statistics and Methodolo gy 1. Please identify all applicable expenses and explain how fees are set. Please describe the relationship between the structure of a mutual fund and the various fees that are charged. The industry contends that the notion that substantial economies of scale should be realized simply because the industry has grown very rapidly is simplistic and flawed.
Economies of scale are one source of downward pressure on fund fee levels.
Please determine whether there are also sources of upward pressure on fee levels. If so, please describe the sources and extent of this pressure. Please describe all of the relevant laws, rules, and regulations governing mutual fund costs and their disclosure. Please evaluate overall prospectus disclosure and sales practices regarding disclosure of costs and their effect on returns. Please evaluate the mutual fund fee table that is required at the front of the prospectus.