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The S&P 500 Index Fund lets you put money into the Commonplace & Poor’s 500 Index, a set of shares that features a few of America’s largest and most profitable firms. The S&P 500 index has returned a mean of about 10% yearly over the long run.
Listed here are the seven greatest S&P 500 index funds, together with mutual funds and exchange-traded funds (ETFs).
Prime S&P 500 Index Funds in 2026
| Fund (ticker) | Annual charge of return for five years | expense ratio | Minimal funding quantity |
|---|---|---|---|
| Constancy Zero Massive Cap Index (FNILX) | 13.2% | 0% | none |
| Vanguard S&P 500 ETF (VOO). | 13.6% | 0.03% | none |
| SPDR S&P 500 ETF Belief (SPY) | 13.5% | 0.095% | none |
| iShares Core S&P 500 ETF (IVV) | 13.6% | 0.03% | none |
| Schwab S&P 500 Index (SWPPX) | 13.6% | 0.02% | none |
| Vanguard 500 Index Fund (VFIAX) | 13.6% | 0.04% | $3,000 |
| Constancy 500 Index Fund (FXAIX) | 13.6% | 0.015% | none |
| Supply: Morningstar, as of February 23, 2026 | |||
Every of those funds tracks the S&P 500 index, so it is no shock that they’ve basically the identical annual returns over the identical five-year interval. The small distinction is principally attributable to charges.
(Strictly talking, the Constancy Zero fund cited above doesn’t monitor the S&P 500, however notice that the large-cap indexes it does monitor are very related.)
Which S&P 500 Index Fund Ought to I Purchase?
Since these funds all monitor the identical index, which S&P 500 fund to purchase will rely upon expense ratios, minimal funding quantities, fund availability, and buying and selling charges.
expense ratio: Regardless of the way you take a look at it, these funds are low cost, even when some are cheaper than others. For instance, the Vanguard S&P 500 ETF prices 0.03% yearly. This equates to $3 for each $10,000 invested within the fund. Not one of the different funds are that costly. In actual fact, S&P 500 index funds are a few of the most cost-effective funds available on the market, costing considerably lower than the common fund.
In the event you select a Constancy Zero fund that does not cost an expense ratio, it’s best to know that you are able to do so by avoiding the S&P model and related charges. Though the fund tracks this essential index successfully, Constancy can not say it’s an S&P 500 fund.
Minimal funding quantity: These funds are additionally very aggressive by way of minimal funding necessities, which is a vital issue for mutual funds. Three of the 4 mutual funds featured right here don’t have any minimums, however the Vanguard 500 fund has a typical minimal of $3,000. ETFs don’t have any minimal funding necessities, however you might have to buy no less than one entire share, and ETF costs can differ extensively. Nonetheless, in the event you work with among the best brokers for fractional inventory buying and selling, you should buy shares for just some {dollars}.
availability: Not all mutual funds can be found with all brokers. For instance, the free Constancy Zero Fund will not present up as an possibility at most brokerages, so you might have to open a Constancy brokerage account in the event you particularly need that fund.
Transaction charges: Most brokers supply free buying and selling of ETFs today, and lots of additionally supply hundreds of “no buying and selling fee” mutual funds. Nonetheless, remember the fact that in the event you’re desirous about a selected firm’s mutual funds, however your brokerage account is with a special dealer (for instance, you actually like that Vanguard fund, however your account is at Constancy), you might incur transaction charges every time you purchase or promote that mutual fund.
Must you put money into an S&P 500 index fund?
The primary attraction of the S&P 500 index fund is that it permits buyers to earn excessive returns over the long run with out having to know a lot about investing. The S&P 500 accommodates 500 shares of the highest U.S. firms, and every share in an index fund provides buyers an oblique possession curiosity in each firm. All of this for one low annual price (expense ratio).
These index funds present prompt diversification and scale back the danger of investing in particular person shares. Though investing shouldn’t be utterly risk-free, S&P has a robust long-term monitor report.
Nonetheless, markets might be unstable within the brief time period. Subsequently, it is very important have a long-term outlook when investing in shares. In the event you want the cash inside three to 5 years, it is most likely a short-term funding. You probably have a long-term outlook, shares (or inventory mutual funds or ETFs) are a sensible funding. You may experience out the volatility and look forward to the decline earlier than promoting at a better worth.
conclusion
S&P 500 index funds are a few of the greatest investments for buyers of all talent ranges, however are particularly useful for novice buyers who can take pleasure in strong returns with out requiring intensive experience. Buyers have a wide range of cheap choices to earn wholesome returns.
Editorial Disclaimer: All buyers are inspired to conduct their very own unbiased analysis on any funding technique earlier than making any funding selections. Moreover, buyers ought to notice that previous efficiency of an funding product doesn’t assure future worth will increase.