NEW YORK — A surging stock market last year not only helped many mutual fund owners earn more but padded returns by pushing more investors into territory where they qualified for lower fund fees.

NEW YORK — A surging stock market last year not only helped many mutual fund owners earn more but padded returns by pushing more investors into territory where they qualified for lower fund fees.

A study going back to 1980 found that mutual fund fees and expenses haven't been lower than they were last year.

Fees declined again in 2006, continuing a multiyear trend, as ever-larger investor portfolios triggered reduced load fees and as funds continued to tamp down expenses to boost their competitiveness. Many growing portfolios had smaller fees taken out because their size enabled them to receive discounts on large purchases as well as fee waivers. Overall, it seems investors had much to cheer about in 2006.

The Investment Company Institute, the mutual fund trade group, found that investors in stock funds paid fees, including both loads and expense ratios, that averaged about 1.1 percent, a decline of .04 percent from 2005.

"It's evidence of competition in the market working. It means there are lower-cost funds there for them to purchase. They can vote with their feet," said Sean Collins, ICI senior economist and author of the annual study since 2000, referring to mutual fund shareholders.

The competition over expense ratios among mutual funds helped lower the average ratio slightly to 88 basis points. A basis point is 1/100 of 1 percentage point.

Investors' migration toward lower-cost funds and a decline in expense ratios have conspired to lower fees and expenses in recent years.

A concentration of assets in investments such as retirement accounts meant many investors were able to skip paying retail and instead receive big discounts. The average maximum sales load on stock funds available to investors was about 5.3 percent last year, but the large sums of money 401(k) plans wield meant discounts and waived fees reduced the average load investors actually paid to 1.3 percent.

"When you come into a fund with a big chunk of money like you would with a 401(k) plan usually a fund will say 'We're not going to charge you a front load,'" Collins said. He noted that a growing number of individual investors are receiving discounts on a sliding scale.

He noted a benchmark level at which investors' assets trigger a fee reduction — a threshold known as a breakpoint — has largely remained at $50,000 for about 25 years. Because of inflation and strong returns this amount of money it's not nearly as hard as it once was for investors to reach this amount and get that bulk rate.

Russ Kinnel, director of fund research at investment research provider Morningstar Inc., oversaw a study that produced similar results last month. He noted that asset growth plays a big part in lowering fees.

"Only a small part of this whole trend is fund companies or fund boards saying 'Lets lower fees.' It's much more the impact of where the money is going and the fact that the money is growing both because you have fund flows increasing and a market rally over all," Kinnel said.

"You had pretty much the entire 1990s when they managed not to pass along any of the economies of scale to investors," Kinnel said of mutual funds over all. "Finally we're seeing some of that go through."

Collins noted that in recent years, investors appear to have grown more careful to evaluate fees, not just performance, when examining where to put their money. And with more companies scrapping traditional retirement plans such as pensions in favor of 401(k) and similar plans, savvy investors have taken steps to learn more about how to evaluate funds given the greater say such workers have in how their money is invested.

The ICI study didn't include so-called fund of funds, which are mutual funds that invest in a basket of other mutual funds in part to achieve a broad array of holdings. Such funds, however, have faced criticism for having high fees because they often not only charge a management fee but because each underlying fund is taking its own cut of fees.

Collins said that including fund of funds would slightly boost the average fee paid for a fund and said overall fees would still show a decline from years past. Fund of funds weren't included in the study in prior years because they weren't as widespread and to do so now wouldn't allow for direct comparisons of year-over-year results.