Tuesday, Fidelity, which has $2.8 trillion under management, announced the addition of four index funds with expense ratios of 0.05% that invest in either mid-cap or small-cap growth or value stocks, as well as a municipal bond vehicle charging 0.07%.
Expense ratios on equivalent funds at Vanguard range from 0.6% to 0.19% depending on the class of investor, according to data compiled by Bloomberg.
Fidelity has been engaging in a price war with competitors as investors flock to the cheapest products. Last year, it offered the first zero-fee index mutual funds.
Across U.S. stock and bond mutual funds and ETFs, passively managed products attracted net deposits of about $252.9 billion in the first half of this year, while the active side of the industry saw $28.5 billion flee, according to data from research firm Morningstar Inc.
In addition to the new mutual funds, Fidelity's 53 existing stock and bond index funds and 11 sector exchange-traded funds carry lower expense ratios than Vanguard's, the company said in a news release.
Last month, Fidelity cut fees on target-date mutual funds and expanded its commission-free ETF platform.
In an interview in November, CEO Abigail Johnson said offering a series of zero-fee funds and eliminating investment minimums were aimed at allowing the firm to "find other ways for people to give us a try."