What Are The Best Index Funds 2017?
The best Standard & Poor’s 500 Index funds are generally the ones with the lowest expense ratios. However, it’s difficult to choose which index fund to buy when so many choices are available. If you are looking for a decent, passively managed US stock fund, there are more than 600 different mutual funds and exchange-traded funds to choose from. And more than 85 are linked to Standard & Poor’s 500-stock index in some way or another. So, let’s take a look at some of the best index funds. If you are looking for other means of investments, here are The 7 Best Short-Term Investment Plans For You!
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Best Index Funds
The fund’s expense ratio dropped by nearly half in the late 2016 (from 0.07%). iShares Core S&P 500 ETF has a low fee (same as the annual fee for its main competitor- Vanguard 500 ETF), giving another reason to like it. It also performs and executes index tracking amazingly. In the last five years period, there has been no S&P 500-tracking index fund or ETF that has been better than iShares at keeping up with the index. Check out Understanding ETFs And Mutual Funds And Their Importance if you struggle to know the difference between them.
Fidelity Total Market Index Fund (FSTMX)
While Fidelity Total Market Index doesn’t hold each and every stock while tracking its index (Dow Jones Total Stock Market Index), its numbers aren’t that bad (3,380 out of 3,813 stocks). It avoids the smallest and least-tradable stocks in the market. Hence, cutting down the fund’s execution costs! The fund’s low expense ratio manages to beat its counterpart, Vanguard Total Stock Market Index Fund, by 0.06 percentage points.
Schwab US Broad Market ETF (SCHB)
The expense ratio charged by Schwab US Broad Market ETF is arguably the lowest charged by any fund or ETF here. It holds nearly 2,000 stocks from more than 2,400 stocks in its index, using a sampling strategy as a tracking method. But the fund’s profile still manages to match its profile to that of the broad market: 72% invested in large-cap companies, 20% in midsize one and 8% in small firms.
Schwab International Equity ETF (SCHF)
When picking Schwab International Equity ETF, your eyes will fall on Vanguard FTSE Developed Markets ETF (VEA). They are neck & neck in terms of their tracking ability and expense ratio. However, Schwab is cheaper! But that is also by a very small distance. But unlike Vanguard which holds a significant number of small-company stocks, Schwab is mostly a large-company fund.
Vanguard 500 Index (VFINX)
When talking about index funds, no one can ignore Vanguard. John Bogle founded Vanguard for the sole purpose of taking S&P 500 Index head on. Vanguard 500 Index has one of the lowest expense ratios. Moreover, the company prioritizes at offering the highest-quality, low-cost mutual funds and ETFs. Check out Wealthfront vs Betterment vs Vanguard Reviews to know more.