Fidelity Investments is expanding its price war with Vanguard with the launch of four new core equity index mutual funds that charge a net expense fee of 0.05% each and one new muni bond index fund that charges 0.07%.
The comparable Vanguard funds charge two basis points more, but those Admiral shares require a $3,000 minimum while these Fidelity index funds, as with all of the firm’s index funds, have no minimums.
The new Fidelity index funds are available to individual investors, financial advisors and workplace retirement plans.
“Fidelity’s goal is to provide exceptional value, simplicity and choice for our customers,” said Colby Penzone, senior vice president of Investment Product at Fidelity. “We saw an opportunity to further expand our robust index fund lineup and bring our expertise into these areas of the market.”
Fidelity’s latest salvo in the index fund price war follows the introduction of four no-fee equity index funds last August and September — for large-cap stocks, small- and mid-caps, international stocks and total stock market market — the elimination of minimum investments for almost all its mutual funds, and the elimination of higher retail fees for multiple index funds in favor of institutional fees.
In addition, this past June Fidelity reduced the expense ratios on the entry-level share classes of its target date funds for individual investors, known as Fidelity Freedom Index Funds, to 12 basis points from 14, as of June 1, undercutting Vanguard’s fees by one to three basis points.