Mutual fund asset management fees grew 20 percent in 1999, down considerably from an average annual growth rate of 36 percent between 1995 and 1998, according to a study by Strategic Insight of New York.

Strategic Insight based its findings on the financial reports of 19 publicly-traded mutual fund complexes with collective assets of $1.5 trillion. These firms control more than one-fifth of total industry assets, according to Strategic Insight.

Although industry assets rose 22 percent in 1999, because only certain pockets of the market experienced growth last year, asset growth, and therefore fee growth, was uneven, according to Avi Nachmany, director of research at Strategic Insight. The study showed "the very selective nature of market appreciation in 1999," he said.

"If you were part of a growth-oriented or tech-oriented enterprise, you gained," Nachmany said.

The study also showed that the growth of funds' operating expenses slowed in 1999. These expenses rose 16 percent last year, as opposed to an average of 33 percent annually between 1996 and 1998, the study showed.

"Expense control was an important element of margin management," Strategic Insight wrote in its report. However, funds are not likely to be able to cap costs so well in coming months, due to heightened competition and shareholders expecting increasing services, Strategic Insight said.

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