Oversight Plan to Include Fund Fees

The House Financial Services Committee is expected to announce today that it will take a close look this year at the fees mutual funds charge their investors and the behavior of the fund industry during the 1990s stock market mania.

The committee is expected to release its so-called oversight plan for the coming Congress, in which it will lay out issues it plans to examine in areas such as securities markets, housing and insurance.

Key among those will be mutual-fund fees, said Peggy Peterson, a spokeswoman for Rep. Michael G. Oxley (R-Ohio), the committee chairman.

“It’ll be a significant part of what we do this year,” she said.

The committee also will look into the role that mutual funds may have played in pumping up the technology-stock bubble of the late-1990s, according to a draft of the oversight plan. That effort will “focus on the hundreds of technology and Internet funds established in the 1990s,” the document says.

This month, Oxley asked the General Accounting Office, the investigative arm of Congress, to do a report on fund expenses

Critics long have attacked fund fees as too high, but the topic garnered scant investor interest during the bull market.

The three-year bear market has renewed attention on the issue.

A key area of inquiry for the committee will be whether fund companies properly disclose the various types of costs that shareholders pay, such as those related to the trading of stocks.

A spokesman for the Investment Company Institute, the industry’s main trade group, said he could not comment on the oversight plan because he had not seen it. However, he defended fund expenses, saying companies properly disclose fees and compete among themselves to keep costs low.