8 Best Index Funds of May 2024 - NerdWallet?

The rise of index funds has provided millions of Americans with a cheaper and more efficient way to invest. With more than $23 trillion in assets between them, BlackRock Inc., Vanguard Group Inc. and State Street Corp . have become the top shareholders in many US-listed companies.

What are the big 3 index funds?

The rise of index funds has provided millions of Americans with a cheaper and more efficient way to invest. With more than $23 trillion in assets between them, BlackRock Inc., Vanguard Group Inc. and State Street Corp . have become the top shareholders in many US-listed companies.

Which index fund gives the highest return?

ICICI Prudential Nifty 50 Index Fund-Growth is among India's top 10 index funds. It falls within the Large Cap Index category. Over the past year, ICICI Prudential Nifty 50 Index Fund-Growth has returned 15.09 percent. Since its inception, it has delivered an average annual return of 14.74 percent.

What is the highest performing Vanguard fund?

Vanguard High-Yield Corporate Fund (VWEAX) The Vanguard High-Yield Corporate Fund is the company's top performing bond fund over the past decade.

What is better than index funds?

Exchange-traded funds (ETFs) and index funds are similar in many ways but ETFs are considered to be more convenient to enter or exit. They can be traded more easily than index funds and traditional mutual funds, similar to how common stocks are traded on a stock exchange.

Is spy better than voo?

Over the long run, they do compound—those fee differences—and investors have been putting a lot more money into VOO versus SPY. That is the reason why we view VOO slightly better than SPY . And that is just the basic approach, which is the lower the investor can pay, the better the investment is.

What is the most aggressive index fund?

The largest Aggressive ETF is the iShares Core Aggressive Allocation ETF AOA with $1.91B in assets. In the last trailing year, the best-performing Aggressive ETF was EAOA at 18.14%. The most recent ETF launched in the Aggressive space was the iShares ESG Aware Aggressive Allocation ETF EAOA on 06/12/20.

What is the safest index fund?

1. Vanguard S&P 500 ETF (VOO 0.58%) Legendary investor Warren Buffett has said that the best investment the average American can make is a low-cost S&P 500 index fund like the Vanguard S&P 500 ETF.

Which index fund pays the most?

The Invesco S&P 500 High Dividend Low Volatility ETF has a 4.74% dividend yield, the highest among our recommendations, but its risk is average. Meanwhile, the iShares Core High Dividend ETF has a 4.09% dividend yield but an expense ratio of only 0.08%, much lower than the 0.3% ratio for the Invesco fund.

What will the S&P be at the end of 2024?

By year-end, the benchmark index (.SPX) , opens new tab will be at 5,302 , according to the median forecast of 50 strategists polled May 13-22.

Is it a good time to buy index funds?

Any time is good for investing in index funds when you plan to hold the fund for the long term . The market tends to rise over time, but not without some downturns along the way, thanks to short-term volatility.

Are index funds good for 5 years?

Long-run performance: It's important to track the long-term performance of the index fund ( ideally at least five to ten years of performance ) to see what your potential future returns might be. Each fund may track a different index or do better than another fund, and some indexes do better than others over time.

How to choose the best index fund?

Cost is often the deciding factor in the selection of an Index Fund . One of the biggest benefits of index funds is their low costs. They are inexpensive to run because they are automated to track changes in an index's value. But don't automatically assume that all index mutual funds are affordable.

8 Best Index Funds of May 2024

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There are more than 20,000 U.S.-listed stocks available to investors. You don't need to buy all of them, but to build a diversified portfolio, it helps to have exposure to a lot of them.

If you don't want to spend hundreds of hours researching individual stocks, another option is to buy index funds — baskets of stocks that track broad-market indexes like the .

Below, we're looking at some of the best index funds that track the S&P 500 and Nasdaq-100 indexes. Note that it's important to research these funds before buying, just as you'd research stocks.

» Need to back up? Check out our primer on stock research.

Best index funds by investment minimum and expense ratio

When it comes to index funds that track the S&P 500 and Nasdaq-100 indexes, two funds stand out in terms of expense ratio and investment minimum:

The Fidelity Zero Large Cap Index (FNILX) is the cheapest major S&P 500 index fund we track.
The Invesco Nasdaq 100 ETF (QQQM) is the cheapest major Nasdaq-100 index fund we track.

5 of the best index funds tracking the S&P 500

Index funds work by tracking specific market indices. So you'll need to know which market index you want your index fund to track before you start investing.

Here are some of the best index funds pegged to the S&P 500.

Index fund	Minimum investment	Expense ratio
Vanguard 500 Index Fund - Admiral Shares (VFIAX)	$3,000.	0.04%.
Schwab S&P 500 Index Fund (SWPPX)	No minimum.	0.02%.
Fidelity 500 Index Fund (FXAIX)	No minimum.	0.015%.
Fidelity Zero Large Cap Index (FNILX)	No minimum.	0.0%.
T. Rowe Price Equity Index 500 Fund (PREIX)	$2,500.	0.20%.

Data current as of May 1, 2024. For informational purposes only.

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Vanguard 500 Index Fund Admiral Shares (VFIAX)

This fund is also known as the Vanguard S&P 500 Index fund. It was founded in 1976 and is the granddaddy of all index funds. Like the other S&P 500 funds on this list, this fund gives exposure to 500 of the largest U.S. companies, which make up about 75% of the U.S. stock market’s total value.

Schwab S&P 500 Index Fund (SWPPX)

As research firm Morningstar notes, this is one of the cheapest S&P 500-tracking funds out there. Launched in 1997, this Schwab fund charges a scant 0.02% expense ratio and requires no minimum investment. That makes it attractive for investors concerned about costs.

Fidelity 500 Index Fund (FXAIX)

Founded in 1988 (formerly known as Institutional Premium Class fund), Fidelity removed this fund's investment minimum so investors with any budget size can get into the low-cost index fund action.

Fidelity Zero Large Cap Index (FNILX)

In the race for the lowest of the low-cost index funds, this Fidelity fund made news by being among the first to charge no annual expenses. That means investors can keep all their cash invested for the long run.

T. Rowe Price Equity Index 500 Fund (PREIX)

Founded in 1990, the fund’s expense ratio is competitive with other providers. However, the $2,500 minimum may be steep for beginning investors.

Top 3 index funds for the Nasdaq-100

Here are some of the best index funds pegged to the Nasdaq-100 index.

Index fund	Minimum investment	Expense ratio
Invesco NASDAQ 100 ETF (QQQM)	No minimum	0.15%
Invesco QQQ (QQQ)	No minimum	0.20%
Fidelity NASDAQ Composite Index Fund (FNCMX)	No minimum	0.34%

Data current as of May 1, 2024. For informational purposes only.

Invesco NASDAQ 100 ETF (QQQM)

QQQM includes 100 of the biggest nonfinancial companies listed on the Nasdaq. It also includes at least 90% of the assets on the NASDAQ-100 index and is rebalanced quarterly.

QQQM has an expense ratio of 0.15%. For every $1,000 invested, you'd pay a $1.50 fee annually.

Invesco QQQ (QQQ)

QQQ holds 101 companies, tracks the NASDAQ-100, and has $151.51 billion in assets under management. QQQ has an expense ratio of 0.20%. For every $1,000 invested, you'd pay a $2 fee annually.

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Fidelity NASDAQ Composite Index Fund (FNCMX)

FNCMX aims to mirror the performance of the Nasdaq Composite index. The fund usually holds 80% of stocks included in the index. In addition to the typical sectors represented by a Nasdaq index fund (such as IT, consumer services and health care), FNCMX also includes the real estate and material sectors.

FNCMX has an expense ratio of 0.37%. For every $1,000 invested, you'd pay a $3.70 fee annually.

Frequently asked questions

What are some of the advantages of index funds?

Exposure to hundreds of stocks with a single purchase.
You can build a balanced, diversified portfolio with just a few index funds.
May be cheaper to buy and easier to research than individual stocks.

What are some of the disadvantages of index funds?

Distributions may generate income tax liability.
Some index mutual funds have large investment minimums.
Index funds can't beat the market — they deliver the market return.

The author owned shares of Invesco QQQ at the time of publication.

8 Best Index Funds of May 2024 - NerdWallet (2024)