Top S&P 500 Index Funds


The Standard & Poor’s 500 Index, or simply S&P 500, is a market-capitalization-weighted index of 500 large-cap U.S. companies that make up 80% of U.S. equity by market cap. It is widely regarded as the best gauge of large-cap U.S. equities and often referred to as “the market” because it is comprised of stocks that span all market sectors. Some of the S&P 500’s largest components include Microsoft Corp. (MSFT), Apple Inc. (AAPL), Amazon.com Inc. (AMZN), Alphabet Inc. (GOOGL), and Facebook Inc. (FB).

There are many funds whose portfolio of stocks are designed to track those of the S&P 500 due to its popularity as a barometer of U.S. equity markets, including both mutual funds and exchange-traded funds (ETFs). The latter type of fund differs from traditional mutual funds in that they are listed on exchanges and trade throughout the day like ordinary stock.

Below we look at the top S&P 500 index funds, one with the lowest fees and the other with the highest liquidity. All data below is as of July 3, 2021.

Lowest Cost S&P 500 Index Fund: Fidelity 500 Index Fund (FXAIX)

FXAIX is a mutual fund. Because index-tracking funds will follow the performance of the index, one of, if not the, biggest determinant of long-term returns is how much it charges in fees.

  • Expense Ratio: 0.015%
  • 2020 Return: 18.4%
  • Yield: 1.31%
  • Assets Under Management: $343.3 billion
  • Minimum Investment: $0
  • Inception Date: Feb. 17, 1988 (Share Class Inception Date: May 4, 2011)
  • Issuing Company: Fidelity

Lowest Cost Runner Up: Schwab S&P 500 Index Fund (SWPPX)

Schwab’s S&P 500 index fund seeks to track the total return of the S&P 500 Index. The fund generally invests at least 80% of its net assets (including, for this purpose, any borrowings for investment purposes) in these stocks; typically, the actual percentage is considerably higher. It generally will seek to replicate the performance of the index by giving the same weight to a given stock as the index does.

  • Expense Ratio: 0.02%
  • 2020 Return: 18.39%
  • Yield: 1.57%
  • Assets Under Management: $62.2 billion
  • Minimum Investment: $0
  • Inception Date: May 19, 1997
  • Issuing Company: Charles Schwab

Lowest Cost Runner Up: Vanguard 500 Index Fund Admiral Shares (VFIAX)

Vanguard was the original index fund and still has the largest assets under management, with over $700 billion in its Vanguard 500 Index Fund Admiral Shares, as of July 2021. The investment seeks to track the performance of a benchmark index that measures the investment return of large-capitalization stocks. The fund employs an indexing investment approach designed to track the performance of the Standard & Poor’s 500 Index.

  • Expense Ratio: 0.04%
  • 2020 Return: 18.25%
  • Yield: 1.33%
  • Assets Under Management: $739.5 billion
  • Minimum Investment: $3,000
  • Inception Date: Nov. 13, 2000
  • Issuing Company: Vanguard

Lowest Cost Runner Up: State Street S&P 500 Index Fund Class N (SVSPX)

Also in the running is State Street’s offering, which also closely tracks the S&P 500 Index. This fund, however, requires a minimum of $10,000 invested.

  • Expense Ratio: 0.16%
  • 2020 Return: 18.59%
  • Yield: 0.94%
  • Assets Under Management: $1.6 billion
  • Minimum Investment: $10,000
  • Inception Date: Dec. 30, 1992
  • Issuing Company: State Street

Most Liquid S&P 500 Index Fund: SPDR S&P 500 ETF (SPY)

SPY is an ETF, not a mutual fund, and it’s not even the lowest-cost S&P 500 ETF. It is, however, the most liquid S&P 500 fund. Liquidity indicates how easy it will be to trade an ETF, with higher liquidity generally meaning lower trading costs. Trading costs are not a big concern to people who want to hold ETFs long-term, but if you’re interested in trading ETFs frequently, then it’s important to look for high liquidity funds to minimize trading costs.

  • 2020 Return: 18.23%
  • Expense Ratio: 0.095%
  • Annual Dividend Yield: 1.3%
  • Assets Under Management: $378.7 billion
  • Inception Date: Jan. 22, 1993
  • Issuing Company: State Street

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.


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