(New York)

It was long awaited, but still hit the market like a hammer. It was one of those things that you can prepare for over a long period, yet are inevitably shocked when it arrives. In this case, it was the long-awaited release of a zero fee index fund. Fidelity was the first to do it, and while it was anticipated, the move is likely to have far-reaching effects on the industry. For instance, one of the big changes is that large index funds will likely no longer pay licensing fees to the indexes themselves. At the same time though, indexes will proliferate for more narrow and niche areas designed to track all manner of themes. Fees will likely continue to fall, even on the more complex products.

FINSUM: Asset management is seeing a very serious race to the bottom, which is reflected in share prices lately. Two thoughts come to mind. Firstly, those with huge scale will be the big winners as the industry grows more consolidated. Secondly, how long before retirement funds seeing a reckoning and a big move out of expensive products (they are paying an average of 61 bp in fees)?

(San Francisco)

Tech stocks have two very unappealing characteristics right now. They are at once both very expensive and increasingly vulnerable, as evidenced by their major selloff over the last week and a half. However, there are cheap tech shares out there, and Barron’s wants to share them with you. The five cheapest tech stocks in the Nasdaq 100 are Micron Technology, Western Digital, Seagate Technology, Lam Research, and Applied Materials. Their P/E ratios range from a low of 5.2x to a high of 11.9x.

FINSUM: Just a note of caution—these stocks were not selected to be good value, they were presented solely on the basis of valuation, so the multiples may be very representative of the quality of their businesses.

(San Francisco)

Facebook had an absolutely historic plunge last week, losing $120 bn of market cap in an afternoon. It has not fared so well since either, as many of its tech brethren have also seen big losses (like Twitter and Netflix). There are also mounting fears about a fundamentally darker future given the scandals and controversies it has become involved in. All that said, the stock still looks like a buying opportunity, at least according to some Wall Street analysts. The key to playing the company is not to wait for signs of margins and revenue stability. “Many investors prefer to wait for the appearance of margin stability … We understand this, but stocks tend to bottom and recover well ahead of margins and trade at much higher multiples when they do”, says a stock analyst.

FINSUM: Investors really need to contextualize this loss. Revenue growth rates came in 1% below expectations, leading to a massive loss. We think there is a good buying opportunity here.

New York)

Fidelity made history this week by introducing the first zero fee funds, which will track very broad self-indexed markets. Fidelity’s move is somewhat of a ploy, and definitely a demonstration of scale, as the company has many ways to profit from a customer once it has them in the door. But don’t be fooled, as fees aren’t everything. In fact, there are significant differences in performance even between index trackers of the same benchmark, like the S&P 500, and the differences between them can add up to a whole lot more than the difference in fees. For instance, Schwab and Vanguard already have broad index trackers at 3 and 6 basis points of fees, so hardly a big difference to zero, especially if their performance is better.

FINSUM: “Zero” definitely changes things, but once you are in the sub-15 bp fee category, performance is going to make a bigger difference than fees.

(Portland)

Retail and consumer stocks have been all over the map over the last couple of years. With digital disruption happening across the industry and consumer tastes changing, it is a hard space to figure out. However, an old stalwart looks like a good pick right now—Nike. The company has had its ups and downs over the last few years as it popularity ebbed, but it is back in a big way with a new distribution model of going direct-to-consumer. Morgan Stanley sums up the company this way, saying it is “positioned to take share in the high-growth, global activewear market as well as increase profitability, which should make it one of the highest growth consumer names and one of the few to benefit from the shift to e-commerce”.

FINSUM: We have been saying for over a year that Nike would prove to be a good bet. It had a couple years of competing poorly with Adidas and Under Armor, but it seems to be back with a bang.