(FORTUNE Magazine) – "Maryland is the Mutual Fund state," declares Paul Anderson, the state's corporate administrator. Thanks to easygoing laws that allow funds to skip some shareholder meetings and dump small accounts, more than a quarter of U.S. investment companies incorporate in Maryland (whose other nickname is the Free State).

"Maryland said that?" asks MFS spokesman John Reilly. "In my mind, Massachusetts is clearly the capital." In the Bay State's defense, Reilly cites its $1 trillion in fund assets, the headquarters of companies like Fidelity, and history: MFS and State Street Research created the first open-end funds in July 1924, starting a long feud about who was first. (It was MFS.) As for Maryland, sniffs State Street CIO Peter Bennett, "they're kind of Johnny-come-latelies."

Okay, then, how about New York? According to the Investment Company Institute, it hosts the most fund complexes--95 (87 of them in New York City), blowing away Maryland's 12 and Massachusetts' 37. Says Big Apple Mayor Rudolph Giuliani: "The numbers speak for themselves. New York City has an unquestionable status as the financial capital of the world."

So which is the real Mutual Fund State? The ICI declines to choose.

--Carol Vinzant