(Photo: AP)

How low can fund costs go? To zero, at least temporarily, according to Charles Schwab.

The firm announced Friday it was launching three new equity index funds and waiving the lower single-digit expense ratios through June 30, 2018.

They are the Schwab U.S. Large Growth Index Fund (SWLGX), Schwab U.S. Large-Cap Value Index Fund (SWLVX) and Schwab U.S. MidCap Index Fund (SWMCX). All three are based on Russell benchmark indexes: the Russell 1000 Growth Index, Russell 1000 Value Index and Russell MidCap Index, and they are expected launch on or about Dec. 20.

Jonathan de St. Paer, Head of Strategy and Product at Charles Schwab Investment Management, tells ThinkAdvisor that the temporary fee waiver is aimed at attracting assets early on to jumpstart growth. “The focus is on making sure to get the product known and assets coming in,” says de St. Paer.

(Related: Schwab Announces Lower Cost ETF for 1,000 Largest US Stocks)

After mid-2018, the two large-cap funds will charge an operating expense ratio of four basis points (0.04%), while the mid-cap fund will charge five basis points (0.05%). There are no investment minimums.

De St. Paer explained that the new funds represent asset classes that were missing from Schwab’s mutual fund lineup although they are included in the firm’s ETF lineup.

(Related: Schwab Cuts Online Trading Costs, Index Mutual Fund Expenses)

Their addition provides “all of the core foundational products investors need for U.S. equity allocation, regardless of vehicle — exchange traded fund or mutual fund — at a great value,” said Marie Chandoha, president and chief executive officer of the investment management unit.

Schwab is the third largest U.S. index fund provider, with a total of 36 index funds with $155.9 billion in assets. Twenty-two are ETFs and 14 are mutual funds, but that number will jump to 17 once the new funds are available for purchase.

Industry inflows into index funds have been favoring ETFs over mutual funds by a ratio of 60/40, said de St. Paer.

— Check out Schwab Ruled the Robo Roost in Q3 on ThinkAdvisor.