DIY Money | Personal Finance, Budgeting, Debt, Savings, Investing Zero Cost Funds
May 28, 2025
Discover the innovative world of zero-cost mutual funds and why they're gaining traction among savvy investors. The hosts share personal anecdotes and community insights that highlight the joys of engaging with like-minded individuals. Learn how these funds help lower entry barriers for younger investors while financial institutions adapt their business models. The conversation emphasizes the importance of mindful investing and highlights key principles for building wealth in a fun and approachable way.
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Fidelity's Four Zero Fee Funds
- Fidelity offers four zero-fee mutual funds including total stock market, large cap, and international funds.
- These funds are part of a strategic move to attract and retain clients on their investment platform.
How Zero Fee Funds Make Money
- Zero-fee funds act as loss leaders to attract investors to a platform, where firms earn revenue from other services over time.
- Revenue streams include margin interest, cash balances, and additional asset management fees.
Zero-Fee Funds Target Younger Investors
- Zero-cost funds appeal mostly to younger investors who are more fee-conscious and tech-savvy.
- Older investors may still prefer higher-fee legacy funds due to familiarity and past habits.