Best Index Funds to Invest In (2026)

Quick answer: The best index funds for most people are broad, very low-cost funds. For most long-term investors, a simple combination of a total U.S. stock market fund (like VTI or VTSAX), an international stock fund (like VXUS), and a total bond market fund (like BND) — often called the “three-fund portfolio” — covers nearly everything most people need. If you’d rather hold a single fund, Vanguard Total World Stock ETF (VT) provides global stock exposure in one purchase.

Compare the top 5 index funds for a core portfolio

Fund (Ticker)	Covers	Expense Ratio	Minimum Investment
Vanguard Total Stock Market ETF (VTI)	Entire U.S. stock market	0.03%	None (ETF share price)
Fidelity ZERO Total Market Index (FZROX)	Entire U.S. stock market	0.00%	None
Vanguard Total World Stock ETF (VT)	Global stocks (10,000+ companies)	0.06%	None (ETF share price)
Vanguard Total International Stock ETF (VXUS)	International developed & emerging markets	0.05%	None (ETF share price)
Vanguard Total Bond Market ETF (BND)	U.S. investment-grade bonds	0.03%	None (ETF share price)

Why Expense Ratio Is the Number That Matters Most

An index fund’s job is simple: track a benchmark as closely as possible, as cheaply as possible. Because most index funds tracking the same benchmark hold virtually identical portfolios, the expense ratio — the percentage of your investment the fund company charges annually — is often the single most reliable difference between two similar options. On a $100,000 portfolio, a 0.03% expense ratio costs roughly $30 a year, while a 1.00% expense ratio costs $1,000 a year, a gap that compounds meaningfully over a multi-decade investing career. That’s why every fund featured in this guide charges 0.06% or less.

Vanguard Total Stock Market ETF (VTI) — Best Core U.S. Stock Holding

VTI (or its mutual fund equivalent, VTSAX) gives you ownership of essentially the entire U.S. stock market in a single fund — about 3,500 companies across large, mid, and small capitalizations — rather than just the 500 largest companies covered by an S&P 500 fund. Its 0.03% expense ratio matches the cheapest S&P 500 funds available, while offering broader diversification.

Expense ratio: 0.03%. Covers: The full U.S. stock market, including small and mid-cap companies an S&P 500 fund excludes.

Best for: An investor who wants the broadest possible U.S. stock exposure in a single fund, including smaller companies that have historically added a modest return premium alongside slightly more volatility.

Fidelity ZERO Total Market Index (FZROX) — Best for a 0% Expense Ratio

Fidelity’s ZERO fund lineup charges no expense ratio at all, making FZROX one of the only ways to own a broad U.S. stock market index fund entirely free of ongoing fund costs. It’s only available to Fidelity account holders and can’t be transferred in-kind to another broker, but for a long-term investor already using Fidelity, it removes fund costs from the equation entirely.

Expense ratio: 0.00%. Covers: A broad swath of the U.S. stock market (a Fidelity-constructed index, not the standard total market index used by VTI).

Best for: A Fidelity investor who wants to eliminate fund expenses entirely and doesn’t anticipate needing to transfer the position to a different broker.

Vanguard Total World Stock ETF (VT) — Best Single-Fund Global Portfolio

VT passively tracks a global index covering more than 10,000 (10,048 as of June 30, 2026) U.S., international developed, and emerging-market stocks in one fund, at a 0.06% expense ratio. For an investor who wants global diversification without managing separate U.S. and international funds, VT offers the simplest possible one-fund approach.

Expense ratio: 0.06%. Covers: The entire global stock market, U.S. and international combined, in market-cap-weighted proportions.

Best for: An investor who wants the simplicity of a single fund covering the whole world, rather than managing separate U.S. and international allocations.

Vanguard Total International Stock ETF (VXUS) — Best for Adding International Diversification

VXUS spans about 8,755 international developed and emerging-market stocks at a 0.05% expense ratio, making it a natural pairing with a U.S.-only fund like VTI for an investor who wants to control their own U.S.-to-international split rather than accepting VT’s fixed global weighting.

Expense ratio: 0.05%. Covers: International developed and emerging-market stocks, excluding the U.S.

Best for: An investor building a “three-fund portfolio” who wants to set their own specific percentage allocation to international stocks rather than using a single global fund.

Vanguard Total Bond Market ETF (BND) — Best Core Bond Holding

BND provides broad exposure to U.S. investment-grade bonds in a single low-cost fund, serving as the “ballast” in a diversified portfolio — bonds typically move somewhat independently of stocks, which can smooth out overall portfolio volatility, particularly for investors closer to needing their money.

Covers: A broad basket of U.S. investment-grade government and corporate bonds.

Best for: An investor who wants to reduce overall portfolio volatility by adding a bond allocation alongside stock index funds, especially as they approach a point where they’ll need to draw on the portfolio.

iShares Core S&P Small-Cap ETF (IJR) — Best for Small-Cap Exposure

IJR tracks the S&P SmallCap 600 Index, which applies stricter profitability requirements for inclusion than some broader small-cap benchmarks. At a 0.06% expense ratio, it’s an inexpensive way to add specifically small-cap exposure on top of a core large-cap holding.

Expense ratio: 0.06%. Covers: Smaller U.S. companies that pass a profitability screen, as defined by the S&P SmallCap 600 Index.

Best for: An investor who already owns a large-cap fund like an S&P 500 index and wants to deliberately add more small-cap exposure than that fund alone provides.

Vanguard S&P 500 ETF (VOO) — A Reasonable Large-Cap Core Alternative

VOO tracks the S&P 500 at a 0.03% expense ratio and remains one of the most widely held funds by long-term investors for exposure specifically to the 500 largest U.S. companies. If your goal is large-cap U.S. exposure rather than the full market (small and mid-caps included), VOO is a reasonable core holding — see our dedicated comparison of S&P 500 index funds for a deeper look at how VOO, IVV, and FXAIX compare against each other.

Expense ratio: 0.03%. Covers: The 500 largest publicly traded U.S. companies.

Best for: An investor who specifically wants large-cap U.S. exposure as a core holding, potentially paired with a separate small-cap fund like IJR for broader coverage.

Building a Simple Portfolio From These Funds

A commonly used approach, often called the “three-fund portfolio,” combines a total U.S. stock fund (like VTI), an international stock fund (like VXUS), and a total bond fund (like BND) in proportions based on your age, goals, and risk tolerance. Investors who want maximum simplicity sometimes replace the first two funds with a single global fund like VT. Generally, a higher stock allocation offers more long-term growth potential alongside more volatility, while a higher bond allocation smooths out returns at the cost of some long-term growth potential — the right mix depends entirely on your own time horizon and risk tolerance, not a one-size-fits-all formula.

How We Chose the Best Index Funds

We prioritized funds with expense ratios at or below 0.06%, broad and well-established benchmarks, and long track records of closely matching their target index. We favored funds available with no minimum investment beyond the price of a single share, and considered whether a fund is available at $0 commission across major brokers. This page is reviewed periodically as fund providers adjust expense ratios — always confirm current fees on the fund provider’s official website before investing, since expense ratios can change and different brokers may offer their own comparable in-house alternatives.

How to Choose the Best Index Funds for Your Mix

Do you want simplicity or control? A single global fund like VT removes the need to manage separate allocations, while a three-fund approach (U.S., international, bonds) lets you set your own specific percentages.

How long until you need the money? A longer time horizon generally supports a higher stock allocation, since there’s more time to recover from short-term volatility; a shorter time horizon typically calls for a larger bond allocation.

Do you already hold an S&P 500 fund? If so, consider whether adding a total market fund (for small and mid-cap exposure) or a dedicated small-cap fund like IJR would round out your portfolio, since the S&P 500 excludes smaller companies entirely.

Which broker do you use? Fidelity, Vanguard, and Schwab all offer nearly identical low-cost index funds, and picking whichever your own broker offers commission-free is often simpler than trying to consolidate funds across multiple platforms.

Are you comfortable with international exposure? Some investors prefer to overweight U.S. stocks relative to a fund’s global weighting; understanding your own comfort level with international allocation is worth deciding deliberately rather than defaulting to whatever a single fund happens to include.

Best S&P 500 Index Funds

Nearly all standard S&P 500 index funds hold an identical portfolio of the same 500 companies, so the differences between them come down almost entirely to expense ratio and where you can buy them. Fidelity’s FXAIX (0.015%) and Fidelity ZERO Large Cap Index (FNILX) (0.00%) are the cheapest options, while Vanguard’s VOO and iShares’ IVV (both 0.03%) are the most widely held ETF versions across brokers.

Fund (Ticker)	Structure	Expense Ratio	Minimum Investment
Vanguard S&P 500 ETF (VOO)	ETF	0.03%	None (share price)
iShares Core S&P 500 ETF (IVV)	ETF	0.03%	None (share price)
Fidelity 500 Index Fund (FXAIX)	Mutual fund	0.015%	None
Schwab S&P 500 Index (SWPPX)	Mutual fund	0.02%	None
Fidelity ZERO Large Cap Index (FNILX)	Mutual fund	0.00%	None
Vanguard 500 Index Fund (VFIAX)	Mutual fund	0.04%	$3,000
SPDR S&P 500 ETF Trust (SPY)	ETF	0.095%	None (share price)

Best ETFs to Buy in 2026

For a foundational holding, Vanguard Total Stock Market ETF (VTI) remains a simple, low-cost core position. If you want concentrated exposure to large technology and AI-related companies, Invesco QQQ Trust (QQQ) is the most widely held option. For investors prioritizing monthly income over maximum growth, JPMorgan Equity Premium Income ETF (JEPI) is one of the most popular covered call ETFs on the market.

ETF (Ticker)	Category	Expense Ratio	What It’s Built For
Vanguard Total Stock Market ETF (VTI)	Core U.S. equity	0.03%	Broad, low-cost foundational holding
Invesco QQQ Trust (QQQ)	Large-cap tech	~0.20%	Concentrated exposure to Nasdaq-100 companies
iShares Expanded Tech Sector ETF (IGM)	Tech / AI thematic	See provider	Broader tech exposure beyond mega-caps
Global X U.S. Infrastructure Development ETF (PAVE)	Infrastructure thematic	See provider	Companies tied to infrastructure spending
JPMorgan Equity Premium Income ETF (JEPI)	Covered call / income	0.35%	Monthly income via an options overlay
iShares Gold Trust (IAU)	Commodity (gold)	~0.25%	Exposure to gold prices without physical storage
Financial Select Sector SPDR Fund (XLF)	Sector (financials)	~0.09%	Concentrated exposure to U.S. financial companies

Sources and Verification

Expense ratios, minimums and holdings counts for the core funds (VTI, VT, VXUS, BND, VOO, IVV, IJR, FXAIX, FZROX, FNILX and SWPPX) were checked on October 16, 2026 against the official pages below; Vanguard figures come from fact sheets dated June 30, 2026. Figures for the other ETFs in the “Best ETFs to Buy” table have not all been re-verified, so confirm them with the provider. We removed past-return figures that we could not source.

• Vanguard fact sheets: VTI · VT · VXUS · BND · VOO
• Fidelity: Index funds (FXAIX, FZROX, FNILX)
• iShares: IVV · IJR
• Schwab: SWPPX
• What an expense ratio is: Investor.gov (SEC)

Bottom line: choosing among the best index funds

The best index funds share three traits: broad diversification, very low costs and a long record of tracking their benchmark closely. For most people, two or three of the best index funds (U.S. stocks, international stocks and bonds) can form a complete portfolio. Use the official links above to confirm current expense ratios before you choose among the best index funds.

Frequently Asked Questions

What’s the difference between an index fund and an ETF? An index fund can be structured either as a traditional mutual fund (bought and sold once per day at the fund’s closing price) or as an exchange-traded fund, or ETF (which trades throughout the day like a stock). Many providers offer both structures tracking the same index, such as Vanguard’s VTSAX (mutual fund) and VTI (ETF).

Is a total market fund better than an S&P 500 fund? Neither is universally “better” — a total market fund like VTI adds small and mid-cap company exposure that an S&P 500 fund excludes, which has historically added a modest return premium alongside somewhat more volatility. Many investors are comfortable choosing either as a core holding.

Do I need international funds if I already own U.S. companies with global revenue? Many U.S. total market funds do include companies with substantial international revenue, which provides some indirect global exposure. However, that’s different from directly owning international stocks, which behave somewhat independently of U.S. markets at different points in a market cycle.

How much do bonds actually reduce risk? Bonds have historically moved somewhat independently of stocks, which can reduce overall portfolio volatility, particularly during stock market downturns — though bonds carry their own risks, including interest rate sensitivity, and don’t eliminate the possibility of loss.

Can I lose money in an index fund? Yes. An index fund’s value moves with its underlying index, so if the market or sector it tracks declines, the fund’s value declines as well. Index funds reduce the risk of picking a single bad stock, but they don’t eliminate broader market risk.

How often should I rebalance my index fund portfolio? There’s no single correct answer, but many long-term investors rebalance once a year or when an allocation drifts significantly from its target, rather than making frequent adjustments based on short-term market movements.

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This article is for educational purposes only and does not constitute financial, investment, or tax advice. CapitalAtlass is not a registered investment advisor. Expense ratios and fund details are reviewed periodically but can change — always confirm current figures on the fund provider’s official website before investing. Past performance does not guarantee future results, and all investing carries risk of loss. Consider speaking with a licensed financial advisor about your individual situation. See how CapitalAtlass is funded in our Legal Notice.