Mutual funds prospered in 2007

Mutual fund companies had a strong 2007, according to data from the Management Practice Inc. Among 18 mutual fund companies studied, the average firm posted an average pre-tax profit margin of 33%, with profit margins ranging from 56% to 25%, according to the firm’s latest bulletin titled “Profitability Benchmarks in Contract Renewal.” In 2006, the 18 companies surveyed posted an average pre-tax profit margin of 32%, with the profit margins ranging between 48% and 22%. When the economy was still in a recession in 2003, the average profit margin was 27% and operating margins ranged between 42% and 20%. “The mutual fund industry is healthy, and the profitability is strong,” said C. Meyrick Payne, senior partner at Management Practice, a mutual fund consulting firm in Stamford, Conn.