Top index funds to invest in
Index funds assure you of ownership of a varied bunch of stocks at a lower price. So, there is more diversification and less risk at a reasonably low price. So, in the last few years, index funds have become more popular than individual stocks. These best index funds 2021 are based on the Standard and Poor’s 500 Index or popularly known as the S&P 500. This index consists of 500 of the most diversified large-cap companies in the country across various sectors.
We have compiled a list of the top S&P 500 index funds that have a low price but high returns.
The Fidelity Zero Large Cap Index (FNILX)
Although this mutual fund tracks the Fidelity Large Cap Index and not the S&P 500 (very negligible differences), it still features on our list because of the zero expense ratio. Since Fidelity doesn’t need to use the S&P 500 name, the costs also are lower. In the long run, costs become a very important factor in deciding which index funds to invest in.
Schwab S&P 500 Index Fund (SWPPX)
This fund tries to duplicate the S&P 500 index and assigns the same weightage to stock much as the index would. A minimum of 80% of its net assets is invested in the stocks of the S&P 500 index. The Schwab S&P 500 Index Fund looks to track the total return of this index. The expense ratio is 0.02%.
SPDR S&P 500 ETF Trust (SPY)
The SPY is an exchange-traded fund (ETF) and it was founded in 1993 and has been one of the most popular ETFs since its inception. It tracks the S&P 500 and as an ETF is highly liquid. By that, we mean that there are usually lower costs of trading this fund. This is especially important if you’re not looking to hold this ETF for the long term. It has an expense ratio of 0.09%.
Vanguard 500 Index Fund Admiral Shares (VFIAX)
One of the originals, the Vanguard 500 Index Fund Admiral Shares has about USD 740 billion of AUM. That’s the largest AUM for any index fund. The expense ratio is 0.04%. The fund mimics the weighting set by its benchmark index, the S&P 500, and seeks to give the same results on the investment.
iShares Core S&P 500 ETF (IVV)
Here is another very popular ETF on the list. It tracks the S&P 500 and is issued by the largest investment company in the world, BlackRock. With an expense ratio of just 0.03%, this fund is comparatively lower in costs and has managed to pay a slightly higher distribution yield than some of its peers.