Fidelity Introduces Zero Expense Ratios

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In a first for mutual funds, Fidelity Investments announced that they have introduced two index mutual funds that have a zero expense ratio — FZROX (Fidelity ZERO Total Market Index Fund) and FZILX (Fidelity ZERO International Index Fund).

Of course, since these are both brand new funds, they do not have any history to go on as to how well they are faring on the market, however, the ability of Fidelity to offer such funds is a huge shot-across-the-bow in terms of pushing others to offer similar funds, especially Vanguard.

But for those of us who follow a Bogleheads’ philosophy of going for index funds and keeping costs low, going from a low-cost fund with an expense ratio of 0.2-0.5%, for instance, will this be a huge benefit over the long term?

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