The Fee Wars are a result of good things like ETFs and index fund popularity and bad things like fund scandals and regulatory actions. As the fund companies hack their fees to the lowest levels in history, investors watch and wait, while enjoying popcorn and beverages, to see who will be crowned the low-fee champion (my money is still on Vanguard).
Companies like Fidelity are challenging Vanguard's position as the low fee fund company by lowering the fees on their index funds. Even American funds has started the battle for managed funds by cutting fees (don't get too excited, managed funds rarely compete with index funds from a fee standpoint).
Last September, I reported on Fidelity cutting fees to compete with Vanguard, but I criticized them for not making the fees permanent. The test must have went well because two months ago they made the fee cuts permanent on the Spartan 500 Index, the Spartan U.S. Equity Index, the Spartan Total Market Share, the Spartan Extended Market Index, and the Spartan International Index.
Fund fees are complicated for the average investor to understand due to 12b-1 fees, management fees and broker fees. But one thing is for sure, lower fees means more money goes to work for you, which is why I advocate No-loads. Long-term, there could be some drawbacks to the fund fee war: less funds entering the industry, good managers leaving for higher pay at hedge funds, or higher minimums, but for the most part, it is a win for investors.
