Price war expands as Fidelity cuts fees for target-date funds
Hundred Dollar Bill Being Cut With a Scissor
Total net expenses for 21 of firm's 22 index funds will be lower than that of similar Vanguard Group products.
Fidelity Investments is cutting fees for a popular retirement vehicle called target-date funds as a price war among financial giants spreads across products.
The Boston-based company announced Wednesday a 14% price reduction on entry-level share classes of the Fidelity Freedom Index Funds and its institutional Index Target Date Commingled Pools. With the cuts, 21 of 22 of the firm’s index funds will have total net expenses lower than comparable Vanguard Group products, Fidelity said in a statement.
(More: Latest price-war salvo pegs fees to low-risk performance)
Target-date funds are increasingly popular as a retirement option, allowing investors to pick the year they expect to retire. Containing a variety of stock and bond funds, the all-in-one vehicles gradually and automatically get less risky as retirement approaches.
Fidelity on Monday expanded its lineup of commission-free exchange-traded funds in the race with rivals to offer cheaper products. It added 150 ETFs to its platform, bringing the total to more than 500, as well as 11 new ETF providers.
Learn more about reprints and licensing for this article.
