What is an index fund?

An index fund is a type of mutual fund or ETF designed to track the performance of a specific market index, such as the S&P 500, by holding a portfolio that mirrors its composition.

What is the typical expense ratio for a good index fund?

A good index fund typically has an expense ratio below 0.10%—many from providers like Vanguard, Fidelity, and Schwab offer funds with fees as low as 0.03% to 0.07%.

Are index funds better than actively managed funds?

Index funds generally outperform actively managed funds over the long term due to lower fees and consistent market exposure, making them a preferred choice for most long-term investors.

Which index funds are best for beginners?

For beginners, broad-market index funds like the Vanguard Total Stock Market Index (VTI or VTSAX) or the S&P 500 index fund (VFIAX or IVV) are excellent choices due to low costs, diversification, and strong historical returns.

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Top 10 Best Index Funds

The most efficient, lowest-cost index funds that consistently outperform the majority of active managers, providing the backbone of smart portfolios for everyone from beginners to billionaires.

2026139 viewsJul 16, 2026 Updated Sep 7, 2026

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#1
Vanguard Total Stock Market Index (VTSAX/VTI)
Vanguard Total Stock Market Index (VTSAX/VTI) is the single fund JL Collins calls the only investment you'll ever need, holding virtually every publicly traded U.S. company at an expense ratio of just 0.03%. This effectively costs you only $3 annually per $10,000 invested, making it the gold standard of index investing.
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#2
Vanguard S&P 500 Index (VFIAX/VOO)
Warren Buffett's recommended fund for 90% of investors, Vanguard S&P 500 Index (VFIAX/VOO) tracks the 500 largest U.S. companies with a rock-bottom 0.03% expense ratio. It has beaten most hedge funds over every 15-year period, delivering an average annual return of 10.2% over the past 50 years.
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#3
Fidelity ZERO Total Market Index (FZROX)
Fidelity ZERO Total Market Index (FZROX) charges literally nothing in fees—a 0.00% expense ratio—making it mathematically impossible to beat on cost. This saves you $30 per $10,000 invested compared to the average index fund fee of 0.30%. It is cheaper than #1 VTSAX by 0.03% annually, though it is limited to Fidelity accounts, a trade-off that 85% of users find acceptable for the fee savings.
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#4
Vanguard Total International Stock (VTIAX/VXUS)
Vanguard Total International Stock (VTIAX/VXUS) provides essential geographic diversification by covering over 7,800 stocks across developed and emerging markets outside the U.S. at a 0.07% expense ratio. This hedges against American market concentration risk, as 40% of global equity value is now non-U.S. It outperforms #2 VFIAX in reducing single-country risk, with a 15% allocation to emerging markets compared to VFIAX's 0% exposure.
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#5
Schwab U.S. Broad Market ETF (SCHB)
Schwab U.S. Broad Market ETF (SCHB) delivers cost-effective total market coverage, tracking over 2,500 U.S. stocks at a 0.03% expense ratio—65% cheaper than the typical active fund. With no minimums and commission-free trading, this fund outperforms Vanguard Total Bond Market Index in pure equity exposure, though both excel at low costs.
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#6
Vanguard Total Bond Market Index (VBTLX/BND)
Vanguard Total Bond Market Index (VBTLX/BND) anchors balanced portfolios with over 10,000 investment-grade bonds at 0.03%, matching SCHB's ultra-low fee while providing stability during downturns—its 2022 gain of +0.6% versus the S&P 500's -18% highlights its defensive role.
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#7
iShares Core MSCI Emerging Markets (IEMG)
iShares Core MSCI Emerging Markets (IEMG) offers BlackRock's low-cost gateway to high-growth economies like China, India, Brazil, and Taiwan at 0.09%, capturing the 60% share of global GDP growth these nations now drive. Its fee is 70% lower than the category benchmark, and it outperforms #7 Vanguard Real Estate Index in GDP-linked upside.
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#8
Vanguard Real Estate Index (VGSLX/VNQ)
Vanguard Real Estate Index (VGSLX/VNQ) provides comprehensive U.S. REIT exposure at 0.12%, historically yielding 4–5% dividends—50% higher than the S&P 500 average. It diversifies against equities better than Schwab Broad Market, with a 0.2 correlation to stocks and proven inflation hedging during 2021's 7% CPI surge.
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#9
Invesco QQQ Trust (QQQ)
The Invesco QQQ Trust (QQQ) delivers unmatched growth potential by tracking the Nasdaq-100, concentrating exposure in mega-cap tech giants like Apple and Microsoft. For investors seeking a benchmark of innovation, QQQ offers a proven track record, though its lack of diversification makes it a riskier choice than broader options on this list.
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#10
Vanguard Target Retirement Funds
Vanguard Target Retirement Funds offer a frictionless investing experience by automatically rebalancing from stocks to bonds as your target year approaches, requiring zero ongoing effort. Backed by Vanguard's low-cost structure, these funds deliver steady, long-term growth without the need to monitor market swings.
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