Fidelity has reduced expense ratios on five equity index funds to the bargain basement price of 10 basis points. Will other index funds be pressured to follow suit?

The funds affected are Fidelity's Spartan 500 Index, Spartan Total Market Index, Spartan Extended Market Index, Spartan International Index and Spartan U.S. Equity Index Fund.

"[The fee reduction] is the latest move in an aggressive effort over the past 18 months to scale back fees, expenses, and commissions on a number of our products in order to ensure that we are positioning ourselves at the head of the pack in a very competitive marketplace," stated Jeff Carney, president of Fidelity Personal Investments.

Fidelity said in the past 18 months it has eliminated loads on direct-sold funds, eliminated front-end charges on funds, and lowered commissions on trades. 

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