Last week, Fidelity
cut fees on five index funds to 10 basis points. Then, days later, Vanguard
investors that an unnamed fund firm's fee cuts could only be temporary. Now, E*Trade
has gotten into the game by undercutting Fidelity by one basis point, the brokerage announced
Smells like a price war.
E*Trade will offer its S&P 500 Index Fund and International Index Funds for nine basis points, one basis point below Fidelity's fee cuts.
E*Trade also highlighted the low cost of its Russell 2000 Index Fund and its Technology Index Funds on its website
, with expense ratios of 26 basis points and 60 basis points, respectively.
One catch: like Fidelity, E*Trade is providing investors with no guarantees about the bargain basement prices. "There is no assurance that ETAM will continue these expense limits beyond April 30, 2005," stated E*Trade on its website
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