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What Fidelity's No-Cost Index Funds Mean for Investors

Fidelity sends a jolt to the asset-management industry.

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Fidelity shook the investment landscape last week when it announced that it would offer two index funds with zero expense ratios: Fidelity Zero Total Market Index (FZROX) and Fidelity Zero International Index (FZILX). And not months in the future, but right away--they went live on Friday! Also striking is that Fidelity removed investment minimums.

I have a couple of thoughts on why Fidelity would do this and what it means for investors. I'll start with the industry view first.

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Russel Kinnel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.