Fidelity's No-Fee Funds Could Benefit Its Competitors

None of the three, however, lowered fees in response, as some have in the past.

(Related: Fidelity Cuts Trading Prices, and Schwab Follows)

Higher cost actively managed funds, however, are not expected to benefit from Fidelity's no-fee funds move and are likely to be negatively impacted if Fidelity's initiative inspires other firms to make similar moves.

"A broader rollout of zero-fee funds, or further reduction of current fee structures, would exacerbate the long-term earnings pressures facing traditional IMs," according to the analysis by Fitch. "This would be particularly challenging for less diversified firms lacking scale, and could spur additional mergers and acquisitions."

Performance and service will be key for traditional asset managers to maintain or expand their footing. "They will have to continue to deliver strong performance or otherwise support their distribution intermediaries with analytical tools or other sources of sales support," according to Moody's analysts.

"Fidelity's zero-funds launch will only continue to sensitize investors to fees and likely relegate many companies as specialists focused on asset classes not easily indexed or accessible through passive investing vehicles."

Active funds that fail to outperform are vulnerable, according to Fitch analysts who cite data from Dimensional Fund Advisors that only about 14% of surviving actively managed U.S. equity funds outperformed their benchmarks after fees over 15 years through the end of 2017.

Between 2016 and the first half of 2018, $563 billion flowed out of actively managed equity funds while $532 billion flowed into passive stock funds, according to Morningstar.