Shares in US fund firms took a beating as Fidelity Investment took the price war to a new level by launching two no-fee funds.

The Boston-based manager announced plans to launch a pair of stock index funds that will carry an expense ratio of zero. It also unveiled plans to cut fees on a host of other index funds and scrap investment minimums on all of its mutual funds and minimum account balances on its brokerage platforms.

Shares of other asset managers plunged on the news. BlackRock, the world’s biggest asset manager, fell 4.6%, while Franklin Resources and Invesco dipped by 5.5% and 4.3% respectively. AllianceBernstein and T Rowe Price slipped by 1.8% and 1.5% respectively.

The zero-expense ratio index funds, the Fidelity Zero Total Market Index fund and the Fidelity Zero International Index fund, will go live on the firm’s brokerage platform on Friday, the firm said.

Access to the zero-expense ratio funds will be restricted to retail investors on Fidelity’s brokerage platform, Fidelity said in a prospectus filed with the Securities and Exchange Commission.

The firm said it would cut expenses across its existing index funds by an average of 35%, which Fidelity said would save investors $47 million annually. Fidelity said all of its stock and bond index funds would have lower expense ratios than Vanguard’s comparable funds and nine out of 10 of Charles Schwab’s comparable index funds.

Charles Schwab said the move was a good one for investors.

‘Anytime costs go down, investors win,’ a Charles Schwab spokeswoman said. ‘We remain laser focused on delivering straightforward, transparent and low-cost products.’

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