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Rating:Fido Cuts Spartan Fund Fees and Minimums Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, December 11, 2012

Fido Cuts Spartan Fund Fees and Minimums

Reported by Neil Anderson, Managing Editor

Ned Johnson and his team are making Fidelity's [profile] index mutual fund lineup cheaper and more accessible.

Today JS Wynant, executive vice president of investment product management and research at the Boston Behemoth, revealed expense ratio cuts for some share classes of eight of Fidelity's Spartan index funds and investor minimum reductions for retail and retirement plan share classes of all 14 of the Spartan funds, effective January 1. Fidelity will lower minimums for eight non-Spartan index funds, too.

"Over the part 18 months, Fidelity has aggressively enhanced its Spartan index mutual fund offering with reduced fees and new products," Wynant stated, describing the changes as part of Fidelity's "commitment to providing workplace retirement plan sponsors and individual investors access to a wide array of high-quality index funds at some of the most competitive pricing in the industry."

The minimum investment required for the 22 index mutual funds' Investor Class shares will drop to $2,500, from $10,000. For the Fidelity Advantage Class shares, minimums will drop to $10,000, from $100,000. And Fidelity will automatically convert qualifying Investor Class shares (i.e., for investors who now meet the lowered minimums for Fidelity Advantage) into Fidelity Advantage Class shares.

On the fee side, Fidelity will cut net expense ratios by one to eight basis points for one to four share classes for eight of the Spartan funds:

  • Spartan 500 Index Fund's Fidelity Advantage shares' expenses will drop one basis point to five bps;
  • Spartan Total Market Index Fund's Fidelity Advantage and Institutional shares' expenses will drop one basis point each, to six bps and five bps each, respectively;
  • Spartan Emerging Markets Index Fund's expenses will drop two bps across the board, to 31 bps for Investor shares, 20 bps for Fidelity Advantage shares, 13 bps for Institutional shares and 10 bps for Fidelity Advantage Institutional shares;
  • Spartan Global ex U.S. Index Fund's Investor shares' expenses will drop two bps to 22 bps;
  • Spartan Mid Cap Index Fund's expenses will drop four bps for Investor and Fidelity Advantage shares and two bps for both institutional classes, to 24 bps for Investor shares, 10 bps for Fidelity Advantage shares, eight bps for Institutional shares and six bps for Fidelity Advantage Institutional shares;
  • Spartan Real Estate Index Fund's expenses will drop three bps to 24 bps for Investor shares, three bps to 10 bps for Fidelity Advantage shares and one bps to eight bps for Institutional shares;
  • Spartan Small Cap Index Fund's expenses will drop eight bps for Investor and Fidelity Advantage shares and six bps for the two institutional share classes, to 30 bps for Investor shares, 16 bps for Fidelity Advantage shares, 14 bps for Institutional shares and 12 bps for Fidelity Advantage Institutional shares; and
  • Spartan U.S. Bond Index Fund's Fidelity Advantage shares' expenses will drop one basis point to 10 bps.

    As of October 31, the 22 index funds affected by the minimums changes held $100.4 billion. $78.5 billion of that was in the eight Spartan funds whose expense ratios will drop for one or more share classes. 

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