By Michael McDonald
(Bloomberg) -- Fidelity Investments is cutting fees for a popular retirement vehicle called target-date funds as a price war among financial giants spreads across products.
The Boston-based company announced Wednesday a 14% price reduction on entry-level share classes of the Fidelity Freedom Index Funds and its institutional Index Target Date Commingled Pools. With the cuts, 21 of 22 of the firm’s index funds will have total net expenses lower than comparable Vanguard Group products, Fidelity said in a statement.
Target-date funds are increasingly popular as a retirement option, allowing investors to pick the year they expect to retire. Containing a variety of stock and bond funds, the all-in-one vehicles gradually and automatically get less risky as retirement approaches.
Fidelity on Monday expanded its lineup of commission-free exchange-traded funds in the race with rivals to offer cheaper products. It added 150 ETFs to its platform, bringing the total to more than 500, as well as 11 new ETF providers.