Fidelity Investments is taking on Vanguard in the target date fund arena. Less than a month after it finished 2020 as the leader in TDF net asset flows, displacing Vanguard, it has slashed the investment minimum for the institutional premium class of its Freedom Index Funds from $100 million to $5 million, matching a similar move made by Vanguard in mid-December.
The change for this low-cost share class, effective today, means more retirement fund sponsors and their participants will have access to the funds at a lower fee.
All but one of Fidelity Freedom Index Funds will have a lower total next expense ratio than comparable Vanguard target date funds, according to Fidelity.
The exception is the investor share class of the Fidelity Freedom Index Income Funds, whose 12 basis-point expense ratio is the same as its Vanguard counterpart.