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  #1  
Old 08-07-2018, 02:33 PM
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Default Fidelity Introduces Zero Expense Ratio Index Funds

https://www.businesswire.com/news/ho...led-Simplicity

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Zero Expense Ratio Fidelity ZERO Index Funds. Fidelity ZERO Total Market Index Fund (FZROX) and Fidelity ZERO International Index Fund (FZILX) are the industryís first self-indexed mutual funds with a zero expense ratio available directly to individual investors. This means investors will pay a 0.00% fee, regardless of how much they invest in either fund, while gaining exposure to nearly the entire global stock market.
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Zero minimums to open accounts; zero account fees; and zero domestic money movement fees for individual investors. Investors of all ages and affluence crave an investing approach and fee structure that is straightforward and simple. Fidelity is taking a leading approach in the industry by implementing across-the-board zero investment minimums to open a Fidelity retail brokerage account (including the Attainable Savings Plan) as well as eliminating account and domestic money movement fees on these accounts. For example, Fidelity will not charge individual investors for domestic bank wires, check stop payments, returned checks and low balance maintenance fees. These changes are effective immediately.

Zero investment minimums on Fidelity mutual funds and 529 plans1. Fidelity will impose no investment minimums on its mutual funds and 529 college savings plans available to individual investors directly from Fidelity or through a financial advisor. These changes are effective immediately.
They have also reduced the expense ratios on their other big index funds.

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Reduced and simplified pricing on existing Fidelity index mutual funds. In addition to offering the industryís first self-indexed mutual funds with a zero expense ratio, Fidelity is reducing the pricing on its existing stock and bond index mutual funds. Fidelity will provide investors the lowest priced share class available, ensuring every investor, regardless of how much they invest, will benefit from the lowest possible fees. The average asset-weighted annual expense across Fidelityís stock and bond index fund lineupís will decrease by 35 percent, with funds as low as 0.015 percent. These changes will save shareholders approximately $47 million annually2. With this action, 100 percent of Fidelityís stock and bond index mutual funds and sector ETFs will have total net expenses lower than all of Vanguardís comparable funds that are available to individuals, advisors and institutional investors.3 In addition, Fidelity beats Schwabís prices for nine of 10 comparable index mutual funds (and is tied on the 10th index mutual fund).
I'm invested pretty heavily in FSTVX and FSIVX in a Fidelity taxable brokerage account, so I'm not planning to switch to the zero fee alternatives because of cap gains. I will consider investing future money in the zero fee versions, because why not... I think they are going to track the same. May need to check on if the international one will track identically or not.

Also from CNBC: https://www.cnbc.com/2018/08/01/fide...ndex-fund.html
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Old 08-07-2018, 02:34 PM
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There has been a race to the bottom for a while, so many expected this. Some predict negative expense ratios at some point.
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Old 08-07-2018, 02:55 PM
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Originally Posted by djdadude View Post
There has been a race to the bottom for a while, so many expected this. Some predict negative expense ratios at some point.
Itís early here and I havenít had coffee. Whatís the line of thinking here? Trying to cross-sell you on other things? Is there value in the data, and they want to scale up on that?

These funds are interesting, though, thanks for bringing this to my attention! I have a lot invested in the Fidelity S&P index that I may move over.
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Old 08-07-2018, 03:02 PM
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Itís early here and I havenít had coffee. Whatís the line of thinking here? Trying to cross-sell you on other things? Is there value in the data, and they want to scale up on that?

These funds are interesting, though, thanks for bringing this to my attention! I have a lot invested in the Fidelity S&P index that I may move over.
Market share.
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Old 08-07-2018, 03:07 PM
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Some forum discussion implies they still make money because of what they make as the share lender on short sales. I don't know many details there.
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Old 08-07-2018, 03:08 PM
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Market share.
And securities lending.
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Old 08-07-2018, 03:09 PM
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If I knew how to avoid Schwab's account closure fees, I'd transfer. But Schwab's expense ratios on index funds are so low, it's not worth it for me right now. Staying put.
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Old 08-07-2018, 03:51 PM
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One please.
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Opinions are provided for entertainment purposes only and are no substitute for professional guidance.
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Old 08-07-2018, 04:19 PM
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Originally Posted by George Frankly View Post
Itís early here and I havenít had coffee. Whatís the line of thinking here? Trying to cross-sell you on other things? Is there value in the data, and they want to scale up on that?

These funds are interesting, though, thanks for bringing this to my attention! I have a lot invested in the Fidelity S&P index that I may move over.
cross-sell, market share, bragging rights. heavy on the cross-sell
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Old 10-11-2018, 01:16 PM
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Originally Posted by djdadude View Post
I'm invested pretty heavily in FSTVX and FSIVX in a Fidelity taxable brokerage account, so I'm not planning to switch to the zero fee alternatives because of cap gains. I will consider investing future money in the zero fee versions, because why not... I think they are going to track the same. May need to check on if the international one will track identically or not.
I believe I just got an email that stated they'll be automatically converting FSTVX and FSIVX to the zero fee alternatives.
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