Price war spreads to index funds as Fidelity slashes fees, minimums

Latest salvo in battle for market share

Dec 11, 2012 @ 2:43 pm

By Jason Kephart

Fidelity, ETF, index funds
+ Zoom
((Photo: Bloomberg News))

The fee war among exchange-traded funds has spread to index funds. Fidelity Investments announced that it is lowering fees on eight of its Spartan index funds as well as the investment minimums for all 14 of its index funds.

The fee cuts range from 1 to 8 basis points. Current shareholders, however, will see the biggest change in cost, as their share class will be upgraded.

The minimum investment for the investor class of the index funds has been lowered to $2,500, from $10,000. The minimum for the Fidelity Advantage share class has been lowered to $10,000, from $100,000. That shift bumps existing investor class shareholders to the more cost-friendly Fidelity Advantage share class, free of charge.

For example, the investor share class of the $48 billion Fidelity Spartan 500 Index Fund charges 0.095%, while the Fidelity Advantage share class will charge just 0.05% after the fee cuts. That will put its cost on a par with the $6 billion Vanguard S&P 500 ETF Ticker:(VOO).

See the full list of changes below:

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

What top advisers are doing to stay ahead of the curve

Top advisers understand that they need to work outside the box and focus on generational reach. Susan Kay of MFS Fund Distributors, Inc. explains.

Latest news & opinion

Sean Spicer resigns as press secretary after Anthony Scaramucci is appointed communications director

Scaramucci is known as an ardent foe of the DOL fiduciary rule, having said during the campaign that Trump would repeal it .

Redoing the math on a 4% retirement withdrawal rate

Given the current interest-rate environment and other factors, advisers disagree about whether the number is too conservative or not conservative enough.

House panel passes bill to replace DOL fiduciary rule with one requiring disclosure of conflicts

Measure likely to continue in partisan advance in House, but could stall in Senate.

Morgan Stanley says recruiting and attrition have slowed down

If wirehouses can successfully reduce their reliance on signing bonuses to recruit brokers, they could increase profits.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print