Investors poured almost $1 billion into Fidelity Investments' two zero-fee index funds in their first month of operation.
The Fidelity Zero Total Market Index Fund attracted $753.5 million through Aug. 31, while the Fidelity Zero International Index Fund gathered $234.2 million, according to Fidelity's website.
"A billion in a month is a great showing when you consider that the funds are available only to retail investors," said Ben Johnson, head of global ETF research at Morningstar.
Mr. Johnson pointed out that bigger, established funds routinely take in more money each month. In July, for example, Vanguard Group's Total International Stock Index Fund attracted $4.8 billion, according to Morningstar data.
Fidelity's unveiling of the funds Aug. 1 was the latest salvo in an ongoing price war for assets that track indexes. Vanguard, BlackRock (BLK) and Charles Schwab have all been slashing fees on passive products to as little as a few pennies per $100 invested.
Fidelity has been matching rivals step for step. Although the firm built its reputation on the strength of its stock pickers, the Boston-based company has been aggressively pursuing passive assets, which have doubled to about $400 billion over the past three years. Fidelity's largest stock fund is now an index fund, the $165 billion Fidelity 500 Index Fund.
So far none of Fidelity's rivals have chosen to match its zero-fee offer.