Fidelity lowers expense ratios and minimums for Spartan funds

[Storm]

A really nice email in my inbox today:

Upcoming changes to Spartan® Index Funds

Dear X,

We would like to inform you of several improvements to one or more of the Spartan® index mutual funds1 that you currently own.

Summary of changes

Effective December 11, 2012

The minimum initial investment for the Investor share class of all Spartan index funds will be reduced from $10,000 to $2,500; for the Fidelity Advantage® share class of all Spartan index funds, it will be reduced from $100,000 to $10,000.2,3
For clients who will now qualify for the Fidelity Advantage® share class, the funds will automatically convert to the appropriate share class during our monthly updating process in January.
Effective January 1, 2013

The expense ratios for several Spartan index funds will be reduced. Please see the chart below for more details on the new fund expense ratios.
The low balance "annual index fund fee" of $10 will be replaced by a new "small balance maintenance fee" of $12, and will only be applied to accounts whose positions fall below the reduced minimum balance amount.
The minimum balance to avoid the "small balance maintenance fee" will be reduced from $10,000 to $2,000.
Why these changes?

The reduction of the expense ratio allows Fidelity to offer our customers some of the best priced index funds in the industry.

Lowering the investment minimums on the Investor and Fidelity Advantage® share classes, as well as changing the low balance fee, makes the funds accessible to more of our valued customers.

Additional information regarding the funds, including their investment objectives, investment policies, fees, and expenses, can be found in the funds' prospectuses on Fidelity.com.

If you have questions regarding these changes, contact your representative or call 800-544-6666. Representatives are available 24 hours a day, 7 days a week.

As always, thank you for investing with Fidelity.

Sincerely,

Fidelity Investments

Fidelity Product Share Class Current Expense Ratio (net) Expense Ratio Drop New Expense Ratio (net)
Spartan 500 Index Fid Adv 0.06% 0.01% 0.05%
Spartan Total Market Index Fid Adv 0.07% 0.01% 0.06%
Spartan Mid-Cap Index Investor 0.28% 0.04% 0.24%
Spartan Mid-Cap Index Fid Adv 0.14% 0.04% 0.10%
Spartan Small-Cap Index Investor 0.38% 0.08% 0.30%
Spartan Small-Cap Index Fid Adv 0.24% 0.08% 0.16%
Spartan Global ex U.S. Index Investor 0.24% 0.02% 0.22%
Spartan Emerging Markets Index Investor 0.33% 0.02% 0.31%
Spartan Emerging Markets Index Fid Adv 0.22% 0.02% 0.20%
Spartan Real Estate Index Investor 0.27% 0.03% 0.24%
Spartan Real Estate Index Fid Adv 0.13% 0.03% 0.10%
Spartan U.S. Bond Index Fid Adv 0.11% 0.01% 0.10%

[Storm]

The total market fund expense ratio is now equal to Vanguard's.

I'm really digging the new minimums on FSTMX (total market fund).  Due to the $10K minimum I couldn't use it in one of my smaller PP portfolios, but now with a $2K minimum I no longer need to use the S&P 500 fund and can go for the total stock market fund, which I believe gives you better overall exposure to equities.

[foglifter]

Storm, thanks for posting this! This is a great news for PP investors. I did a quick check for TSM and a few otehr funds and it does look like Advantage funds  now match Vanguard Admiral shares and ETFs. With 10K minimum purchase Advantage class funds are now within reach for a moderate-size portfolio.

Fidelity clearly tries to become more competitive with Schwab and Vanguard - they probably sense that the game is changing as more and more investors get to appreciate index funds.

A side question: did you sign up for this type of e-mails? I don't recall getting any communication from Fidelity about this change. Perhaps I unchecked that particular type of notifications in my Fidelity profile.