Fidelity Investments has taken another aggressive move to cut fees and minimums for its index funds, introducing two index funds with a zero expense ratio and no minimum investment. In addition, Fidelity is eliminating the minimum investment for 21 other index funds and consolidating their expense ratios so that there will be one fee for retail and institutional investors.
Kathleen Murphy, president of Fidelity Investments’ personal investing business, in a statement said the firm’s latest move is “rewriting the rules of investing to deliver the unparalleled value and straightforward investing options that individuals need and deserve.”
Starting Friday, August 3, the Fidelity ZERO Total Market Index Fund (FZROX) and Fidelity ZERO International Index Fund (FZILX) will be available to individual investors for no fee and no minimum investment.
In addition, there will be no investment minimum for 21 other index funds, including equity and bond funds, and retail investors will be charged the same lower expense ratios as institutional investors. The retail and institutional share classes of these funds will be consolidated under one single share class with one single trading symbol.
Fidelity has also eliminated investment minimums on all its Fidelity mutual funds and 529 plans, including funds sold directly to consumers or through a financial advisor — changes that take effect immediately. Only a small number of institutionally priced fixed income and Freedom Index funds will maintain their current investment minimums.
“The groundbreaking zero expense ratio index funds combined with industry-leading zero minimums for account opening, zero investment minimums, zero account fees, zero domestic money movement fees and significantly reduced index pricing are unmatched by any other financial services company,” said Murphy.
Fidelity said the average asset-weighted annual expenses across its stock and bond index funds will decline 35 basis points, with some index funds charging as little as 0.015%.