Fidelity reduces bond fund expenses; But other companies are unlikely to follow suit.(News)

Investment News, June, 2005

Byline: David Hoffman NEW YORK - To some investors, Fidelity Investments' recent lowering of expenses on 12 taxable-investment-grade-bond funds may not seem like that big a deal. After all, dropping expenses to 0.45%, from a range of 0.50% to 0.65%, doesn't appear to be a dramatic cut.

But even a small cut in expenses can make a world of difference to bond funds, according to industry experts. The reason is that bond funds, particularly those that invest in government and municipal securities, generally deliver consistent but nominal returns, said Scott Berry, an analyst with Morningstar Inc. in Chicago. As a result, expenses have a greater opportunity to eat away at bond fund returns than they do at equity fund returns, he said....

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