Investing in index funds is a smart and low-maintenance way to grow your wealth over time. Index funds offer broad market exposure, low fees, and reliable long-term returns. Whether you’re new to investing or looking to fine-tune your portfolio, these top picks can help put your money to work more efficiently.
1. Vanguard 500 Index Fund (VFIAX)
The Vanguard 500 Index Fund is one of the most popular and trusted index funds available. It aims to mirror the performance of the S&P 500, which tracks 500 of the largest U.S. companies.
- Low expense ratio: Just 0.04%, which means more of your money stays invested.
- Strong historical performance: The S&P 500 has historically returned around 8–10% annually over the long term.
- Diversification: Exposure to blue-chip companies across sectors like tech, healthcare, and finance.
2. Fidelity ZERO Total Market Index Fund (FZROX)
If you’re looking for a no-fee option, this fund is an excellent choice. It tracks a broad swath of the U.S. stock market and has zero expense ratio—literally.
- No minimum investment: Great for beginners or those with limited funds to start.
- Zero expense ratio: 100% of your money goes to work in the market.
- Broad market exposure: Includes small-, mid-, and large-cap U.S. stocks.
3. Schwab U.S. Broad Market ETF (SCHB)
Offered by Charles Schwab, SCHB is a low-cost, diversified ETF that tracks a broad U.S. stock index. It’s ideal for investors who want one fund to capture almost the entire U.S. equity market.
- Expense ratio of 0.03%: One of the lowest in the industry.
- Over 2,500 holdings: Offers more diversification than the S&P 500 alone.
- Commission-free trades: If you’re a Schwab customer, you can trade it without fees.
4. Vanguard Total Stock Market Index Fund (VTSAX)
VTSAX is a comprehensive index fund that includes nearly all publicly traded U.S. companies. From startups to giants, this fund doesn’t leave much behind.
- Total market coverage: Includes large-, mid-, and small-cap stocks in one fund.
- Low fees: Expense ratio is 0.04% with a $3,000 minimum investment.
- Long-term growth: Suitable for investors aiming for overall U.S. market participation.
5. iShares Core MSCI Total International Stock ETF (IXUS)
Adding international exposure can reduce risk and increase your portfolio’s potential. IXUS includes developed and emerging market stocks outside the U.S.
- Global diversification: Exposure to over 4,000 companies across the world.
- Low cost: Expense ratio of 0.07%.
- Complements U.S. investments: Helps balance your overall asset allocation.
Final Thoughts
Index funds are a powerful tool for building long-term wealth thanks to their simplicity, low fees, and diversification. Whether you’re just starting or optimizing your current investments, the funds listed above can enhance your returns while minimizing the work required. As always, make sure your investment choices align with your financial goals, risk tolerance, and time horizon.