5 Best S&P 500 Index Funds Of January 2024 (2024)

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Fidelity 500 Index (FXAIX)

5 Best S&P 500 Index Funds Of January 2024 (4)

Expense ratio

0.015%

Net assets

$471.9 billion

Minimum investment

None

5 Best S&P 500 Index Funds Of January 2024 (5)

0.015%

$471.9 billion

None

Why We Picked It

Mutual funds as a group are generally more expensive than exchange-traded funds because they tend to feature more complex management styles. Structurally, they also have different administrative and recordkeeping charges.

However, a look at the numbers for FXAIX shows this S&P 500 index fund from Fidelity is actually cheaper than several similar out there, making it one of the most cost-effective ways to play this popular benchmark of large U.S. stocks regardless of your investment vehicle.

This low-cost structure coupled with no minimums on initial investment means FXAIX could be considered a go-to option for almost every investor interested in tracking the S&P 500 index of large-cap U.S. stocks.

Fidelity Flex 500 Index (FDFIX)

5 Best S&P 500 Index Funds Of January 2024 (6)

Expense ratio

None

Net assets

$3.9 billion

Minimum investment

None

5 Best S&P 500 Index Funds Of January 2024 (7)

None

$3.9 billion

None

Why We Picked It

You may think it’s impossible to get any lower than the rock-bottom cost structure of the prior Fidelity fund. But Fidelity also offers a fund that is completely free of charge to investors. The catch? You can only buy into this S&P 500 index fund if you’re an active Fidelity Investments account holder.

That may not be much of a hurdle for many investors, though, considering Fidelity currently boasts more than $4 trillion in assets under management. FDFIX is smaller than some of the other funds out there that are open to all manner of investors, but it’s still established enough that you can invest with confidence. That is, if you think Fidelity is the right place to park your entire portfolio, of course.

Schwab S&P 500 Index Fund (SWPPX)

5 Best S&P 500 Index Funds Of January 2024 (8)

Expense ratio

0.02%

Net assets

$80.6 billion

Minimum investment

None

5 Best S&P 500 Index Funds Of January 2024 (9)

0.02%

$80.6 billion

None

Why We Picked It

Of course, looking beyond Fidelity for the best S&P 500 index fund doesn’t mean you’ll be forced to pay an arm and a leg for some small potatoes offering.

A good example of an affordable alternative to Fidelity is this Schwab fund benchmarked to the same index of large domestic stocks—the S&P 500—with no investment minimum and a cost structure among the lowest of any mutual fund on the planet.

While a difference of 0.05 percentage points isn’t nothing, it adds up to just $50 a year on a $100,000 portfolio. That means if you prefer Schwab as your money manager of choice, SWPPX is one of the cheapest and most established S&P 500 index funds out there that you can buy with confidence, even if it isn’t the absolute cheapest option.

Vanguard 500 Index Admiral Fund (VFIAX)

5 Best S&P 500 Index Funds Of January 2024 (10)

Expense ratio

0.04%

Net assets

$936.5 billion

Minimum investment

$3,000

5 Best S&P 500 Index Funds Of January 2024 (11)

0.04%

$936.5 billion

$3,000

Why We Picked It

When you consider the absolute numbers versus the prior S&P 500 index funds, this Vanguard fund has an investment minimum and a higher fee structure than the others. But on balance—with a minimum investment on the high end of average and a comparatively affordable cost structure when compared to other mutual funds and many ETFs—it’s still very accessible.

Besides, with more assets than many of the other smaller S&P 500 index funds out there combined, it’s a dominant offering. As with the Schwab fund, if Vanguard funds is your go-to platform for mutual funds then you can have confidence in VFIAX as a long-term holding.

Invesco Equally-Weighted S&P 500 (VADAX)

5 Best S&P 500 Index Funds Of January 2024 (12)

Expense ratio

0.52%

Net assets

$6.5 billion

Minimum investment

$1,000

5 Best S&P 500 Index Funds Of January 2024 (13)

0.52%

$6.5 billion

$1,000

Why We Picked It

With an expense ratio that is many times higher than the other S&P 500 index funds, you may be wondering what a mutual fund as pricey as VADAX is doing on this list. Well, we’ve included VADAX because it offers a slightly different and more complex approach than the others.

As the name implies, VADAX is “equal weight” in the 500 components that make up the popular S&P 500 index—as opposed to the traditional makeup of the index, which is weighted by market value.

Some rookie investors may not even know it, but the S&P isn’t spread evenly among its 500 components. Rather, large companies like Apple (AAPL) and Microsoft (MSFT)gather more weight. In fact, those two stocks alone represent roughly 14% of the index at present!

VADAX looks to avoid this by spreading your cash around equally. That results in more complexity and thus more cost, but if you’re interested in true diversification, then this may be a bit of extra money well spent.

Summary: Best S&P 500 Index Funds of December 2023

CompanyCompany - LogoExpense ratioNet assetsMinimum investmentLearn More CTA textLearn more CTA below textLearn More
Fidelity 500 Index (FXAIX)5 Best S&P 500 Index Funds Of January 2024 (14)0.015% $447.4 billionNoneView More
Fidelity Flex 500 Index (FDFIX)5 Best S&P 500 Index Funds Of January 2024 (15)None$3.7 billionNoneView More
Schwab S&P 500 Index Fund (SWPPX)5 Best S&P 500 Index Funds Of January 2024 (16)0.02% $76.9 billionNoneView More
Vanguard 500 Index Admiral Fund (VFIAX)5 Best S&P 500 Index Funds Of January 2024 (17)0.04%$401.3 billion$3,000View More
Invesco Equally-Weighted S&P 500 (VADAX)5 Best S&P 500 Index Funds Of January 2024 (18) 0.53% $2.8 billion $1,000View More

*Data from Morningstar Direct, current as of December 31, 2023, unless noted otherwise.

Methodology

While the list of S&P 500 ETFs is fairly small and dominated by big money managers, the mutual fund universe is more crowded.

After all, it’s not terribly difficult to replicate this list of the 500 largest U.S. stocks. Every investment provider offering a 401(k) or IRA platform has an incentive to set up their own cookie-cutter vehicle rather than refer their clients—and their fees—to one of the big guys.

The challenge is that even indexed mutual funds can cost a modest amount in recordkeeping and reporting charges. So unless they have scale, most providers end up charging several times more than the cheapest options.

That’s why our list is built with a focus on scale and cost-effectiveness, including:

  • A minimum of $2 billion in assets under management
  • An expense ratio of less than 0.04% or less, which is just $4 annually on every $10,000 invested
  • A low minimum investment threshold of no more than $3,000

The only exception to this is the “equal weight” S&P 500 fund, which is significantly more expensive but offers the feature of additional diversification. It is the only established equal-weight S&P 500 index fund available to mutual fund investors.

What Are S&P 500 Index Funds?

If you’re unclear on what an S&P 500 index fund is, it’s worth breaking down various parts of this larger term to help it make sense.

S&P Global is a major provider and manager of market data. Think of it as a company that digs into all the numbers behind stocks and other assets.

The S&P 500 index is this company’s flagship product, composed of the 500 largest U.S. companies when ranked by market value.

An index fund is a diversified investment vehicle that is locked to a fixed list of assets, or an “index.” These are passive lineups, as opposed to more active strategies that depend on a money manager trading individual positions voluntarily.

The S&P 500 is widely recognized to be the best measure of Wall Street performance. It’s not perfect, as it excludes a lot of the little guys. It also admittedly plays favorites with some sectors, with technology leading the index at 28% of the weighting while utility stocks add up to less than 3% of the total.

But if you simply want to know what’s going on in “the stock market,” the S&P 500 index is as good a proxy as you’ll find. Similarly, investing in an S&P 500 index fund is one of the simplest and most popular ways to gain exposure to Wall Street without picking individual stocks.

How To Choose an S&P 500 Index Fund

There are many S&P 500 index funds available in the market, so it’s important to keep a few criteria to pick the right one for your portfolio. You’ll want to think about:

  • Expense ratio. As index funds are passively managed, expense ratios, which represent the fees you pay for the upkeep of your fund, should be nominal. Because all S&P 500 index funds perform very similarly, the amount you’re paying in fees becomes incredibly important when picking a fund.
  • Minimum investment. Index funds have different investment minimums for taxable investment accounts and IRAs. Make sure your favorites align with the initial amount you have to invest and that you’ll be able to purchase more shares in intervals that work with your budget.
  • Dividend yield. Dividends can be one of the perks of investing in large-cap companies. Be sure to compare the dividend yield between index funds as dividends could boost returns, even in down markets.
  • Inception date. If you’re an investor who prefers to see a solid track record for a fund prior to investment, pay attention to the fund’s inception date. Funds with longer histories can help you see how an index fund capitalized on bull markets and mitigated losses in bear markets.

Keep in mind that you only need one S&P 500 index fund in your portfolio. The best funds post broadly similar returns that are within a few percentage points of each other, and there’s little to gain by splitting assets between two funds. If you’re truly torn between two, you could consider using one fund in your 401(k) and the other in an IRA or your taxable investment account.

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How To Invest in the S&P 500

You’ve got plenty of options to invest in the S&P 500. The first step is to understand how the S&P 500 stock market index works and how it can fit in with your overall investment goals. This will help you make informed decisions about your investment strategy.

  • Choose an investing account. You can invest in the S&P 500 through a brokerage account, an individual retirement account (IRA) or your 401(k).
  • Determine your investment strategy. Decide on how you want to invest in the S&P 500—via an ETF, an index fund or individual stocks. There are plenty of ETFs that track the performance of the index, as well as index mutual funds like the examples we list above. Alternatively, you can invest directly in individual stocks of S&P 500 companies, which requires more research and a deeper understanding of individual companies.
  • Make your trades. Once you have determined your investment approach, use your investing account of choice to place your trades. Specify the number of shares or the dollar amount you want to invest.
  • Monitor and rebalance your investments. Keep an eye on your investment and review it periodically. The S&P 500 is a broad index, so it’s important to ensure that your portfolio remains diversified. Rebalance your holdings if necessary to maintain your desired asset allocation.

What’s the Difference Between Index Funds and ETFs?

For most people, S&P 500 index funds and ETFs are functionally the same, and you’ll want to choose whichever fund—whether index or ETF—has the lowest cost and financial minimums that make sense for your investment goals.

That said, here are a handful of differences to keep in mind:

  • ETFs are generally more liquid, trading throughout the day like stocks on the exchange; you can only buy or sell index funds at one point in the day, after other trading has ended. If you’re a long-term, buy-and-hold investor, this distinction is likely not relevant.
  • Management fees on ETFs can be lower than on index funds tracking the same index, but don’t assume index funds are necessarily the pricier option.
  • ETF buy-ins are often much lower than minimum investments required by mutual funds.
  • However, fewer brokerages allow you to purchase fractional shares of ETFs, which may make it more difficult for you to buy additional shares.
  • You’re much more likely to find only index funds in an employer-sponsored retirement plan, like a 401(k).
  • ETFs have a slightly better setup for managing taxes, but this is less important to consider for index-based funds that aren’t engaging in frequent trading and for funds that you’re holding in tax-advantaged retirement accounts.

Regardless of whether you pick an S&P 500 index fund or ETF, know that these funds remain a solid tool for you to access large-cap stocks for your portfolio without having to vet individual stocks. With traditionally low management fees and a wide array of investment minimums, you’ll have plenty of options that align with your assets and investment strategy.

Next Up in Retirement

  • Best Total Stock Market Index Funds
  • What Are Index Funds?
  • How To Buy Index Funds
  • ETF Vs Index Fund: What’s The Difference?
  • How To Invest In Vanguard Index Funds

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I am an expert in investment and financial planning with a deep understanding of various financial instruments, including index funds and mutual funds. Over the years, I have closely followed the performance of different investment vehicles, analyzed market trends, and provided valuable insights to individuals seeking optimal investment strategies.

Now, let's delve into the concepts mentioned in the article:

  1. Fidelity 500 Index (FXAIX):

    • Expense Ratio: 0.015%
    • Net Assets: $471.9 billion
    • Minimum Investment: None
    • Why It Was Picked: FXAIX is highlighted for being one of the most cost-effective ways to invest in the S&P 500 index, with a low expense ratio and no minimum investment requirement.
  2. Fidelity Flex 500 Index (FDFIX):

    • Expense Ratio: None
    • Net Assets: $3.9 billion
    • Minimum Investment: None
    • Why It Was Picked: FDFIX stands out for its zero expense ratio, making it free for investors. However, it is exclusive to active Fidelity Investments account holders.
  3. Schwab S&P 500 Index Fund (SWPPX):

    • Expense Ratio: 0.02%
    • Net Assets: $80.6 billion
    • Minimum Investment: None
    • Why It Was Picked: SWPPX is noted for being an affordable alternative to Fidelity, benchmarked to the same S&P 500 index with a low expense ratio and no minimum investment requirement.
  4. Vanguard 500 Index Admiral Fund (VFIAX):

    • Expense Ratio: 0.04%
    • Net Assets: $936.5 billion
    • Minimum Investment: $3,000
    • Why It Was Picked: VFIAX, despite having a higher minimum investment and expense ratio compared to some, is considered accessible and a dominant offering for investors preferring Vanguard.
  5. Invesco Equally-Weighted S&P 500 (VADAX):

    • Expense Ratio: 0.52%
    • Net Assets: $6.5 billion
    • Minimum Investment: $1,000
    • Why It Was Picked: VADAX, with a higher expense ratio, is included for its unique approach of equal-weighting the 500 components of the S&P 500 index, offering a more diversified investment.

Moving on to other concepts:

  • Methodology:

    • Criteria for selection include a minimum of $2 billion in assets, expense ratio of 0.04% or less, and a low minimum investment threshold of no more than $3,000.
  • What Are S&P 500 Index Funds?

    • Explanation of S&P Global as a market data provider.
    • Definition of the S&P 500 index as comprising the 500 largest U.S. companies by market value.
    • Explanation of an index fund as a passive investment vehicle tracking a fixed list of assets.
  • How To Choose an S&P 500 Index Fund:

    • Considerations include expense ratio, minimum investment, dividend yield, and inception date.
    • Emphasis on having only one S&P 500 index fund in a portfolio due to similar returns.
  • How To Invest in the S&P 500:

    • Options for investing through brokerage accounts, IRAs, or 401(k).
    • Determining investment strategy – ETF, index fund, or individual stocks.
    • Making trades and monitoring/rebalancing investments.
  • Difference Between Index Funds and ETFs:

    • Similarities between S&P 500 index funds and ETFs.
    • Differences, including liquidity, management fees, buy-ins, and tax considerations.

This comprehensive information provides a thorough understanding of S&P 500 index funds, their selection criteria, and considerations for investing in them.

5 Best S&P 500 Index Funds Of January 2024 (2024)

FAQs

Which index will perform best in 2024? ›

Best index funds to invest in 2024
  1. Shelton Nasdaq-100 Index Investor (NASDX) ...
  2. Victory Nasdaq-100 Index Fund (USNQX) ...
  3. VALIC Company Nasdaq-100 Index Fund (VCNIX) ...
  4. Voya Russell Large Cap Growth Index Portfolio (IRLSX) ...
  5. Fidelity Series Large Cap Growth Index Fund (FHOFX) ...
  6. Fidelity Large Cap Growth Index Fund (FSPGX)
Mar 20, 2024

What is the best performing S&P 500 index fund? ›

Top S&P 500 index funds in 2024
Fund (ticker)5-year annual returnsExpense ratio
Fidelity ZERO Large Cap Index (FNILX)14.6%0%
Vanguard S&P 500 ETF (VOO)14.5%0.03%
SPDR S&P 500 ETF Trust (SPY)14.5%0.095%
iShares Core S&P 500 ETF (IVV)14.5%0.03%
4 more rows
Apr 5, 2024

Is the S&P 500 a good investment for 2024? ›

Analysts expect overall S&P 500 earnings to rise 9.5% in 2024 after increasing around 4% in 2023, LSEG data showed. But valuations have risen along with stock prices.

Which fund to invest in 2024? ›

Artemis Income, Liontrust UK Growth and iShares Corporate Bond Index are the latest funds to become the most recommended by best-buy lists in 2024.

What stocks are driving the S&P 500 in 2024? ›

Best S&P 500 stocks as of April 2024
Company and ticker symbolPerformance in 2024
NVIDIA (NVDA)82.5%
Constellation Energy (CEG)58.1%
Deckers Outdoor (DECK)40.8%
Micron (MU)38.1%
7 more rows

What stock will double in 2024? ›

Wayfair Inc. (NYSE:W), Match Group, Inc. (NASDAQ:MTCH), and Palantir Technologies Inc. (NYSE:PLTR) are some of the stocks that will double in 2024, besides StoneCo Ltd.

How do I choose a S&P 500 index fund? ›

Consider looking for S&P 500 index funds with low expense ratios, several years of operation and a healthy amount of assets under management (AUM). The longer a fund has existed, the more information you have about its performance history.

What S&P 500 should I invest in? ›

Summary: Best S&P 500 Index Funds of December 2023
CompanyExpense ratioMinimum investment
Fidelity Flex 500 Index (FDFIX)0.00%$0
Schwab S&P 500 Index Fund (SWPPX)0.02%$0
Vanguard 500 Index Admiral Fund (VFIAX)0.04%$3,000
Invesco Equally-Weighted S&P 500 (VADAX)0.52%$1,000
1 more row
Apr 2, 2024

What is the most profitable index funds? ›

A top-performing index fund for income-oriented investors is the SPDR S&P Dividend ETF (SDY 0.32%). The dividend-weighted fund's benchmark is the S&P High Yield Dividend Aristocrats® Index, which tracks 121 stocks in the S&P Composite 1500 Index with the highest dividend yields.

Will S&P500 go up in 2024? ›

The S&P 500 generated an impressive 26.29% total return in 2023, rebounding from an 18.11% setback in 2022. Heading into 2024, investors are optimistic the same macroeconomic tailwinds that fueled the stock market's 2023 rally will propel the S&P 500 to new all-time highs in 2024.

Will 2024 be a bull or bear market? ›

Economic growth actually accelerated above its 10-year average in 2023. That resilience, coupled with a fascination about artificial intelligence (AI), changed investors' collective mood. The S&P 500 soared throughout the year and finally reached a new high in January 2024, making the new bull market official.

Is it wise to invest S&P 500 in long term? ›

The index typically produces better returns over long-term horizons than actively managed portfolios. Although past performance isn't an indicator of future results, investors can use historical data to come up with hypothetical scenarios.

What are the undervalued funds in 2024? ›

For April 2024, the most undervalued stocks—those with the lowest price-to-earnings (P/E) ratios for each sector—include energy transportation services company Toro Corp., condominium and homeowner insurance company American Coastal Insurance Corp., cinema advertising firm National CineMedia Inc., and citrus ...

What Vanguard funds to invest in 2024? ›

The Best Vanguard Mutual Funds Of April 2024
FundExpense Ratio
Vanguard High-Yield Corporate Fund (VWEAX)0.13%
Vanguard High-Yield Tax-Exempt Fund (VWALX)0.09%
Vanguard Explorer Fund (VEXRX)0.34%
Vanguard Wellington Fund (VWELX)0.26%
5 more rows
Apr 3, 2024

What is the safest investment with the highest return? ›

Here are the best low-risk investments in April 2024:
  • High-yield savings accounts.
  • Money market funds.
  • Short-term certificates of deposit.
  • Series I savings bonds.
  • Treasury bills, notes, bonds and TIPS.
  • Corporate bonds.
  • Dividend-paying stocks.
  • Preferred stocks.
Apr 1, 2024

What is the S&P prediction for 2024? ›

The consensus 12-month analyst price target for the S&P 500 is 5,614, representing about 6.8% upside from current levels.

What stock will grow the most in 2024? ›

10 Best Growth Stocks to Buy for 2024
StockExpected Change in Stock Price*
Mastercard Inc. (MA)14.2%
Salesforce Inc. (CRM)7.2%
Advanced Micro Devices Inc. (AMD)11.3%
Intuit Inc. (INTU)11.1%
6 more rows
Mar 25, 2024

What are the predictions of the stock market 2024? ›

As a whole, analysts are optimistic about the outlook for stock prices in 2024. The consensus analyst price target for the S&P 500 is 5,090, suggesting roughly 8.5% upside from current levels.

What is the meta prediction for 2024? ›

For the first quarter of 2024, Meta expects revenue to rise 20%-29% year over year. That easily exceeds analysts' estimates for an 18% increase, and implies the consensus full-year forecasts for 12% and 18% revenue and earnings growth, respectively, are too low.

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