Are No Fee Funds the Future?

Fidelity's no-fee index funds have rocked the investment world, but what does it mean for investors and rival firms?

Russel Kinnel 9 August, 2018 | 2:32PM

Fidelity's Zero Fees

Fidelity shook the investment landscape last week when it announced that it would offer two index funds with zero fees to US investors.

Fidelity can afford to offer index funds below their cost because they will make it up with all the other funds and services that clients will buy. Fidelity has a unique position in the industry in that it is a big player in both actively and passively managed funds. In addition, Fidelity has always wanted to be the biggest and best. Other parts of the business remain quite profitable.

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About Author

Russel Kinnel  is Morningstar's director of fund research. He is also the editor of Morningstar FundInvestor, a monthly newsletter dedicated to helping US investors build winning portfolios.

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