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This is a reason why investors in mutual funds have an uphill fight.

Shareholders in the giant Fidelity Magellan Fund (FMAGX) recently saw their fees leap to $124.1 million for a single year via a 35.9% boost in the basic expense charge. Meanwhile, the fund, as of April 22, is down 43.8% in the past 12 months.

It's almost a percentage-for-percentage swap: The more of your money it lost, the more it charged.

And this Fidelity fund is hardly alone. More than 25% of mutual funds raised their expense ratios in 2008, according to Morningstar. Most of them acted for one or both of two related reasons:

* Fewer assets means higher unit costs per dollar invested.

* Management contracts often call for fee cuts when assets rise -- and vice versa. Market losses in 2008 were some of the largest in history, so assets fell.

Fidelity Magellan's story is a little different from most. Its managers got big raises in 2008 based on their performance the three previous years. This year they'll likely take cuts.

But the impact is the same: Magellan shareholders are paying more. While losing more.

Unfortunately there isn't an easy solution otherwise most people would be doing it, and those that think it is easy end up losing their money via people like Madoff.
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