Watch Out Vanguard: Fidelity Now Boasts Cheapest Sector ETFs After Cutting Fees


An article reported that Fidelity Investments will lower expense ratios on 27 index funds and ETFs on July 1, ramping up its competition with Vanguard. According to the article, the Fidelity 500 Index fund (FUSEX), which tracks the Standard & Poor’s 500 stock index, charges 0.09% annual for individual investors, versus 0.16% for the Vanguard 500 Index Fund Investor Shares (VFINX). Fidelity’s minimum investment in the fund is $2,500, vs. $3,000 for Vanguard’s S&P 500 fund.

The article adds that the fee cuts extend across all four share classes of Fidelity’s index funds. For example, the Fidelity 500 Index fund’s premium share class, which has a $10,000 minimum, will fall to 0.045%, vs. 0.05% for the similar Vanguard 500 Index Admiral shares.

Furthermore, Fidelity also cut the expense ratios of 11 sector ETFs from 0.12% to 0.08%, again pricing it below Vanguard’s offerings. For example, the Vanguard Information Technology ETF (VGT) charges 0.10% annually, while the iShares U.S. Technology ETF (IYW) weighs in at 0.43%.



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