Sept. 1, 2004 — Fidelity Investments slashed the expenses on five of its equity index funds available to individual and group-retirement plan investors.

Effective August 31, the expense ratios for Fidelity Spartan 500 Index (FSMKX), Fidelity Spartan Total Market Index (FSTMX), Fidelity Spartan Extended Market Index (FSEMX), Fidelity Spartan International Index (FSIIX) and Fidelity Spartan US Equity Index (FUSEX) will be indefinitely capped at 0.10%. The annual expenses on these funds formerly ranged from 0.47% to 0.19%

Fidelity noted the reductions make these portfolios “among the lowest-cost equity index funds in the mutual fund industry.”

“This is an attempt by Fidelity to make some market inroads into the low-cost fund business that Vanguard has dominated for a long time,” said Kenneth R. Hoffman, president of mutual fund consulting firm Optima Group Ltd. “Vanguard funds have attracted tremendous amounts of assets through their low-cost fee structure, and it appears that Fidelity now wants to go after it.”

Hoffman also noted that the overall mutual fund industry is “facing pricing pressures due to the regulatory environment they find themselves in now. Everyone is very conscious of fees.”

Contact Bob Keane with questions or comments at bkeane@investmentadvisor.com.