In the years-long race among mutual fund and exchange-traded fund providers to offer the lowest possible fees, Fidelity finally crossed the finish line. The firm recently announced two index mutual funds that come with no investment minimums and a 0% expense ratio. Fidelity Zero Total Market Index (symbol FZROX) tracks the U.S. stock market, and Fidelity Zero International Index (FZILX) tracks stocks abroad.
What’s the catch? The funds are available only to individual investors with Fidelity brokerage accounts. To save on management costs, Fidelity will not license indexes from outside providers but will instead benchmark the funds to indexes assembled by Fidelity. Prospective investors should monitor the funds’ performance compared with other low-cost funds that track traditional indexes, says Charles Rotblut, vice president of the American Association of Individual Investors.
Fidelity’s zero-expense funds could prompt other fund companies to follow suit, says Kathy Carey, a director of research at investment management firm Baird. But some firms may not bother, she says, given that they already offer funds with minuscule expense ratios—as low as 0.03% at Charles Schwab, for instance.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
-
What You Need to Know About Taxes in a Gray DivorceIf you're not careful about how assets are divided or sold, you could get hit with a big tax bill.
-
Focus on These Five Critical Areas in Retirement PlanningWorried about how you'll pay for your retirement? It can help to structure your finances around five key areas: taxes, income, medical, legacy and investments.
-
Best Banks for High-Net-Worth Clients 2024wealth management These banks welcome customers who keep high balances in deposit and investment accounts, showering them with fee breaks and access to financial-planning services.
-
Stock Market Holidays in 2024: NYSE, NASDAQ and Wall Street HolidaysMarkets When are the stock market holidays? Here, we look at which days the NYSE, Nasdaq and bond markets are off in 2024.
-
Stock Market Trading Hours: What Time Is the Stock Market Open Today?Markets When does the market open? While the stock market does have regular hours, trading doesn't necessarily stop when the major exchanges close.
-
Bogleheads Stay the CourseBears and market volatility don’t scare these die-hard Vanguard investors.
-
The Current I-Bond Rate Until November Is Mildly Attractive. Here's Why.Investing for Income The current I-bond rate is active until November 2024 and presents an attractive value, if not as attractive as in the recent past.
-
What Are I-Bonds? Inflation Made Them Popular. What Now?savings bonds Inflation has made Series I savings bonds, known as I-bonds, enormously popular with risk-averse investors. So how do they work?
-
This New Sustainable ETF’s Pitch? Give Back Profits.investing Newday’s ETF partners with UNICEF and other groups.
-
As the Market Falls, New Retirees Need a Planretirement If you’re in the early stages of your retirement, you’re likely in a rough spot watching your portfolio shrink. We have some strategies to make the best of things.
