Many mutual funds are lowering their fees, a practice that began as a maneuver to try and regain investors' trust following the trading scandals of 2003, The Wall Street Journal reports.

The number of mutual funds that lowered their management fees exceeded 850 last year, up from 239 in 2003, a study by Lipper reveals. The study forecasts that by the end of this year, the number of funds to lower their fees will hit 700.

"The reason for the sharp rise in management-fee cuts is the examination by Elliot Spitzer in 2003," said Kip Price, head of Lipper's global fiduciary review unit. "A light was shown on fees, and then there were cuts."

Not only had many funds been a part of improper trading, they had failed to decrease fees as their assets swelled, Spitzer has argued.

"Hopefully this will be a trend," Spitzer told the Journal in an interview. "When we examined fees, we found that many mutual fund boards were not fulfilling their obligation to actively negotiate for lower fees on shareholders' behalf."

The post-scandal fee cuts affected all areas of mutual funds, including hedge funds. The biggest cuts occurred in the most expensive funds. For example, the median global stock and sector funds cost about 1.74% as of June 30, down from 1.85% and 1.88%, at the end of 2003.

Though the cuts don't look too impressive on their own, they are certainly notable when compared to the expense ratios. The median diversified U.S. stock expenses ratio reached about 1.45% as of June 30, down from 1.5% at the end of 2003.

Even firms not caught up in scandal have cut their fees, such as Fidelity, Vanguard and T. Rowe Price.

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