The mutual fund industry might be appeasing investors by cutting management fees, but it's yet to embrace the performance-based fees its loosely regulated counterpart, the hedge fund industry, has used to its advantage.

Charging performance fees, and cutting them in times of poor performance, is an uncommon practice in the mutual fund world, according to a report in yesterday's Wall Street Journal. Only 3% of mutual funds charge performance fees, and of those, which include Fidelity's Magellan and Vanguard's Windsor II, only 8% make up the roughly $7.5 trillion in assets in the industry, according to Lipper.

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