Shares in publicly traded mutual fund management companies have soared 54% this year, compared to approximately 5% for the
Fund companies have expenses to pay regardless of whether markets rise or fall, but because investors hate to pay fees when they're losing money, many fund companies made big cuts or delayed certain projects to keep these expenses as low as possible.
When markets began to rise again, stock prices rise, assets rise, fees rise and profits rise. The typical expense ratio for stock funds is about 1.2%, according to
Matt Snowling, an analyst for
"The rally here in these names is overdone," he said, but if the bull market continues, fund companies could remain a good bet.