In another nod to the growing popularity of index funds, Fidelity Investments has launched three new, low-cost Treasury bond index funds, the Boston-based company said late last week.

The new funds expand its number of index funds from nine to 12.

The Spartan Short-Term, Spartan Intermediate, and Spartan Long-Term Treasury bond funds would be appropriate for investors who wish to avoid credit risk and are seeking the income and tax benefits of Treasury notes, Fidelity officials said. The funds will track the Lehman Brothers 1-5 Year Treasury Index, the Lehman Brothers 5-10 Year Treasury Index and the Lehman Brothers Long Treasury Index, respectively.

The funds are offered in two share classes. The lowest cost Fidelity Advantage Class shares require a minimum investment of $100,000. Expenses are capped at 10 basis points. For investors who do not meet the $100,000 minimum, an Investor Class is offered with an expense ratio of 20 basis points.

"The funds should appeal to investors who currently buy or ladder individual treasury securities and might like the convenience of investing in mutual funds," said John Sweeney, senior vice president, Fidelity personal investments, in a statement. "In addition, investors already owning a Treasury bond fund might want to consider these low-cost alternatives."


William Irving, who since 2004 has been managing a number of Fidelity fixed-income portfolios, such as the Fidelity Advisor Inflation Protected Bond fund and the Fidelity Advisor Government Investment fund, will manage the new index funds.

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