What is the cheapest S&P 500 index fund?
Lowest Cost S&P 500 Index Fund: Fidelity 500 Index Fund (FXAIX) FXAIX is a mutual fund. Because index-tracking funds will follow the performance of the index, one of, if not the, biggest determinant of long-term returns is how much it charges in fees.
VOO and IVV boast the lowest management fee at 0.03%, about one-third of the SPY ETF. While the difference between a 0.03%, and 0.0945% expense ratio may seem trivial, such fees can really add up. For every $10,000 invested, these respective fees equal $3 and $9.45 annually.
Index fund | Minimum investment | Expense ratio |
---|---|---|
Vanguard 500 Index Fund - Admiral Shares (VFIAX) | $3,000. | 0.04%. |
Schwab S&P 500 Index Fund (SWPPX) | No minimum. | 0.02%. |
Fidelity 500 Index Fund (FXAIX) | No minimum. | 0.015%. |
Fidelity Zero Large Cap Index (FNILX) | No minimum. | 0.0%. |
The best way to invest in the S&P 500 is to buy exchange-traded funds (ETFs) or index funds that track the index. There are differences between these two approaches that we'll examine below, but in either case, these funds offer extremely low costs and superior diversification.
Online trading platforms like Ally Invest and E*TRADE® offer commission-free trading.
Fund (ticker) | 5-year annual returns | Expense ratio |
---|---|---|
Fidelity ZERO Large Cap Index (FNILX) | 14.6% | 0% |
Vanguard S&P 500 ETF (VOO) | 14.5% | 0.03% |
SPDR S&P 500 ETF Trust (SPY) | 14.5% | 0.095% |
iShares Core S&P 500 ETF (IVV) | 14.5% | 0.03% |
Vanguard's unique cost structure, the economies of scale it has achieved, and the total number of assets under management (AUM) allow it to offer its ETFs at the lowest cost available in the market. We've listed 10 of the firm's cheapest ETFs by their expense ratio.
Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.
The S&P 500's track record is impressive, but the Vanguard Growth ETF has outperformed it. The Vanguard Growth ETF leans heavily toward tech businesses that exhibit faster revenue and earnings gains. No matter what investments you choose, it's always smart to keep a long-term mindset.
For beginners, the vast array of index funds options can be overwhelming. We recommend Vanguard S&P 500 ETF (VOO) (minimum investment: $1; expense Ratio: 0.03%); Invesco QQQ ETF (QQQ) (minimum investment: NA; expense Ratio: 0.2%); and SPDR Dow Jones Industrial Average ETF Trust (DIA).
How to invest in S&P 500 Index Fund for beginners?
- Find your S&P 500 index fund. It's actually easy to find an S&P 500 index fund, even if you're just starting to invest. ...
- Go to your investing account or open a new one. ...
- Determine how much you can afford to invest. ...
- Buy the index fund.
In 1980, had you invested a mere $1,000 in what went on to become the top-performing stock of S&P 500, then you would be sitting on a cool $1.2 million today.
Is Investing in the S&P 500 Less Risky Than Buying a Single Stock? Generally, yes. The S&P 500 is considered well-diversified by sector, which means it includes stocks in all major areas, including technology and consumer discretionary—meaning declines in some sectors may be offset by gains in other sectors.
Placing all of one's assets in an index such as the S&P 500, which is concentrated in large-cap US companies, is a high-risk and volatile strategy. When working with clients, we gauge each individual's capacity for accepting risk.
What does the S&P 500 measure? The S&P 500 tracks the market capitalization of the roughly 500 companies included in the index, measuring the value of the stock of those companies. Market cap is calculated by multiplying the number of stock shares a company has outstanding by its current stock price.
The Vanguard S&P 500 ETF (VOO -0.60%) is a top choice for most index fund investors. Even Warren Buffett recommends it above any other investment. There's a good reason for that. Its low expense ratio and tight index tracking make it a top choice for anyone looking to match the returns of the S&P 500.
KEY U.S. | LAST | CHG |
---|---|---|
S&P 500 | 5022.21 | -29.20 |
Russell 2000 | 1947.95 | -19.53 |
OTHER U.S. | LAST | CHG |
DJ Transportation Average | 14986.55 | -259.68 |
A 3 fund portfolio is an asset allocation mix comprising three asset classes, domestic stocks, international stocks, and domestic bonds. Standard & Poor's 500 is a market index that tracks the market value and performance of the top 500 US large-cap stocks.
Overall Rating
Morningstar has awarded this fund 5 stars based on its risk-adjusted performance compared to the 1293 funds within its Morningstar Category.
- Fidelity Series Large Cap Growth Index Fund (FHOFX) ...
- Fidelity Large Cap Growth Index Fund (FSPGX) ...
- Schwab U.S. Large-Cap Growth Index Fund (SWLGX) ...
- Fidelity U.S. Sustainability Index Fund (FITLX) ...
- Fidelity 500 Index Fund (FXAIX) ...
- Schwab S&P 500 Index Fund (SWPPX)
Which fund gives highest return?
Scheme Name | Plan | 1Y |
---|---|---|
Invesco India Contra Fund - Direct Plan - Growth | Direct Plan | 44.40% |
Quant ELSS Tax Saver Fund - Direct Plan - Growth | Direct Plan | 61.08% |
ITI ELSS Tax Saver Fund - Direct Plan - Growth | Direct Plan | 53.47% |
- Options commissions.
- Only offers fractional share investing on Vanguard ETFs.
- Active trading platform isn't as robust as competitors.
Fidelity is your answer. The tension between these two starts for those investors who are looking to compare mutual funds, fees, account minimums and investment offerings.
Both Fidelity and Vanguard have a wide variety of low-cost mutual funds and ETFs. If you're simply looking at the options offered by each firm, Fidelity has more options available.
VOO has low fees, a low expense ratio, and no minimum investment. This makes it more accessible for newer investors who may not have an extra $3,000 to drop into VFIAX. As of March 2023, VOO has $774.8 billion in total assets and $274.3 billion in net assets with 507 total holdings.
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