The shareholder who is suing Fidelity Investments, contending that the mutual fund industry has not passed along to investors the reduced costs which economies of scale bring, owns funds whose expenses have decreased as a percentage of assets, Fidelity says.

Fidelity last week asked a judge to dismiss the case which fund shareholder Richard T. Krantz filed in September against Fidelity's parent, FMR Corp., and five of its subsidiaries. In court papers filed Jan. 11 in US District Court in Boston, Fidelity found fault for several reasons with Krantz's allegations that Fidelity funds' directors are not independent and have approved "disproportionately large" fees for Fidelity.

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