When giants fight, it can only hurt the little people. That is an aphorism that the smaller fund industry players should keep close to heart as Fidelity, Vanguard and ETF giants Barclays and State Street battle it out in their undeclared price war. On Monday, Fidelity threw another bomb in those price wars.

The Boston Behemoth cut prices on four of its broad U.S. index funds to seven basis points for accounts with more than $100,000 in assets. That move is a direct blow at Vanguard's Admiral share class that charges nine basis points for similar products. It also makes index funds an increasingly attractive alternative to ETFs, which typically carry higher transaction costs than open-end funds.

The Boston Behemoth is even hitting a Vanguard-like note with the by naming the new lower-priced shares its Advantage Class.

The move is seen as a Fidelity attempt to use its scale to recapture fund flows that have moved to competitors and ETFs. It also comes as the firm has seen flows into many of its actively-managed funds slow or even turn negative.

Jeff Carney, president, Fidelity Personal Investments, said that the cuts are part of a long-term strategy at Fidelity. He added that Fidelity will automatically convert qualifying accounts to the Advantage shares unless they opt not to. The regular share class of the four funds -- Spartan 500 Index Fund, Spartan U.S. Equity Index Fund, Spartan Total Market Index Fund, and Spartan Extended Market Index Fund -- is 10 basis points.

"For years Fidelity has been aggressively cutting fees, lowering commissions, and making it easier for investors to manage their money," said Carney. He added that he believes it will be difficult for investors to find a better value than Fidelity's new package.

Meanwhile, Vanguard is seeking ways to lower its costs as it finds itself in the midst of a price war.

Bloomberg reports Jack Brennan is asking crewmembers to save cash by recycling old stationery.

"How much is it going to save us?" he asked, according to Bloomberg. "Fifty bucks? It's the client's 50 bucks, so why wouldn't I do that?"  

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