Best S&P 500 index funds of March 2024 (2024)

Investing

Tony Dong

Stephanie Steinberg

Verified by an expert

“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.

Farran Powell

Verified by an expert

“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.

BLUEPRINT

Updated 9:35 a.m. UTC March 5, 2024

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S&P 500 index funds are popular investment choices thanks to their low costs, minimal turnover rate, simplicity and performance.

“The provides broadly diversified exposure across both sectors — such as technology, health care and financials — and styles, such as growth and value,” says Michelle Louie, senior portfolio manager at Vanguard’s Equity Index Group.

Our selection of the best S&P 500 index funds for 2024 all have a 10-year annualized tracking error of 0.25% or less, a net expense ratio under 0.2%, at least $1 billion in total assets, a 4-star minimum Morningstar rating, and at least a 10-year track record.

Best S&P 500 index funds

Fidelity 500 Index Fund (FXAIX)
Vanguard 500 Index Fund Admiral Shares (VFIAX)

Why trust our investing experts

Experienced fund analysts select our best fund selections based on a screening of several must-have metrics. Some of these metrics include but are not limited to assets under management, expense ratio, strategy, management, minimum investment requirements, turnovers and fees. You can read more about our methodology below.

7 index funds screened.
4-star rating or higher from Morningstar.
3 levels of fact checking.
3-step editorial review.

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Best S&P 500 index funds

Fidelity 500 Index Fund (FXAIX)

Expense ratio

0.015%

Total assets

$515.2 billion

Fund 10-year annualized return as of March 1

12.02%

What you should know

Fidelity Investment’s flagship FXAIX fund remains one of the most popular S&P 500 index funds among U.S. investors, and for good reason. With a 0.015% expense ratio, or just $1.50 in fees for a $10,000 investment, this fund offers extraordinary value. Fidelity has also made this fund extremely accessible to investors of all account sizes, with no transaction fees, sales loads or minimum investments. The fund has been around since 1988, so you can be assured of its long history of competent management.

Pros and cons

Pros

A very low expense ratio of 0.015%.
No minimum required investment.
No sales loads or transaction fees.

Cons

Lack of U.S. small-cap equity exposure.
Lack of international equity exposure.
FXAIX’s top 10 holdings make up around a quarter of the portfolio.

Schwab S&P 500 Index Fund (SWPPX)

Expense ratio

0.02%

Total assets

$88.5 billion

Fund 10-year annualized return as of March 1

11.97%

What you should know

SWPPX was created by Charles Schwab to provide investors with a straightforward, low-cost and simple way to track the returns of the S&P 500 index. The fund charges a low 0.02% expense ratio and does not impose a minimum investment requirement. Since 1997, SWPPX has attracted around $80 billion in total assets. Like all S&P 500 index funds, SWPPX falls into the large-blended Morningstar category for U.S. equities.

Pros and cons

Pros

Low expense ratio of 0.02%.
Low fund turnover rate of 2%.
No minimum initial investment is required.

Cons

Lack of U.S. small-cap equity exposure.
Lack of international equity exposure.
Over a quarter of the portfolio is concentrated in technology.

State Street S&P 500 Index Fund Class N (SVSPX)

Expense ratio

0.16%

Total assets

$1.4 billion

Fund 10-year annualized return as of March 1

11.90%

What you should know

State Street Global Advisors is best known for its flagship SPDR S&P 500 ETF (SPY), but it also offers SVSPX for investors who prefer mutual funds over ETFs. This fund represents the “N” share class, launched in December 1992. Like most S&P 500 index funds, SVSPX has low turnover, and diversification among all 11 stock market sectors. The fund pays out distributions on a quarterly basis with a current 1.55% yield.

Pros and cons

Pros

Lower minimum initial and additional investment requirements.
Long track record of performance since 1992.
Operated by a well-regarded fund manager.

Cons

A higher expense ratio of 0.16%.
A lower AUM compared with other highly ranked options.

Compare the best S&P 500 index funds

FUND TICKER	EXPENSE RATIO	10-YEAR ANNUALIZED RATE	TOTAL ASSETS
FXAIX	0.015%	12.02%	$515.2 billion
VFIAX	0.04%	11.99%	$1.0 trillion
SWPPX	0.02%	11.97%	$88.5 billion
SVSPX	0.16%	11.90%	$1.4 billion

Methodology

Our curated ranking of the top S&P 500 index funds was created by screening a list of all available U.S.-listed S&P 500 index funds based on the following must-have metrics:

Morningstar rating: All the funds selected hold at least a 4-star rating from Morningstar. This is a quantitative, rearward-looking measure of a fund’s historical performance.

Tracking error: To measure this, we assessed how much a fund’s 10-year annualized performance differed from that of the S&P 500 index’s 10-year annualized return of 12.26%. All the funds on this list had a tracking error of 0.25% or less, with lower being better.

Total assets: All the funds on this list have accrued at least $1 billion in assets under management. We only considered assets for the specific share class profiled. In general, greater assets signal greater fund popularity among investors.

Expense ratio: To be considered for this list, an S&P 500 index fund must have a net expense ratio of 0.2% or less. This factor was weighted heavily as it has the greatest effect on an S&P 500 index fund’s tracking error and performance.

Management style: All the funds on this list are passively managed in that they seek to replicate the exact holdings of the S&P 500 index and its returns net of fees. Actively managed funds that use the S&P 500 as an underlying index, but target an objective or return not matching the index (such as leveraged, inverse or income-oriented exposure) were excluded.

This set of criteria enables investors to screen for S&P 500 index funds that are passively managed, charge low fees, tightly track their benchmark index and are managed by a reputable fund manager with a proven record of performance.

An experienced fund analyst selected the funds above, but they may not be right for your portfolio. Before purchasing any of these funds, do plenty of research to ensure they align with your financial goals and risk tolerance.

Why other S&P 500 index funds didn’t make the cut

Because S&P 500 index funds all track the same benchmark, this list focused on funds with the lowest expense ratios among their peers. All else being equal, the largest determinant of an S&P 500 index fund’s performance will be fees. Funds with higher fees tend to incur a higher tracking error relative to their benchmark, especially over long periods of time.

This list focuses on passively managed S&P 500 index funds and excludes actively managed funds that still use the S&P 500 index as an underlying asset. Examples include leveraged S&P 500 funds, inverse S&P 500 funds or S&P 500 funds that employ derivatives to produce higher yields or hedge against a crash.

Final verdict

An S&P 500 index fund is an excellent core holding for U.S. investors and a great way to track the domestic stock market at a low cost with a passive approach. This type of index fund can help you build a complete, globally diversified portfolio when coupled with a U.S. small-cap fund and an international stock fund. An S&P 500 index fund can be used for a high-conviction, long-term bet on U.S. large-cap stocks.

Our recommendation for the best overall S&P 500 index fund is the Fidelity 500 Index Fund (FXAIX). With a 0.015% expense ratio, this fund is the cheapest one on our list. In addition, the fund does not have a minimum initial investment requirement, sales loads or trading fees. Over the last 10 years, the fund has returned an annualized 12.23%.

Why S&P 500 funds are a popular investment

are a popular investment primarily due to their low cost, strong historical performance and simplicity. With a single ticker, investors can access 500 of the leading U.S. companies for a small fee. This is much more affordable and cost-efficient than buying 500 U.S. stocks individually.

Because the S&P 500 index is used as a benchmark and is difficult for many active funds to beat, many investors will pick S&P 500 index funds to match the market’s long-term average return, which is called passive investing.

What to think about when choosing an S&P 500 index fund

Because all S&P 500 index funds track the same benchmark, the primary factor to think about is expense ratios. Fees directly reduce your fund’s returns, so keeping them as low as possible is crucial. All else being equal, lower fees result in a smaller tracking error, which increases how accurately your S&P 500 index fund tracks its benchmark.

After fees, other things to think about include whether the fund has any minimum initial investment requirements, transaction fees or deferred sales charges. Finally, consider assessing the fund’s track record and the fund manager’s reputation in terms of the fund’s tenure and total assets.

Editor’s Note: This article contains updated information from a previously publishedstory.

Frequently asked questions (FAQs)

S&P 500 index funds are investment vehicles that attempt to replicate the holdings in and the returns of the S&P 500 index. They are a great low-cost way to gain exposure to the performance of U.S. large-cap stocks from all 11 stock market sectors.

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Tony Dong

BLUEPRINT

Tony Dong is a freelance financial writer with bylines in U.S. News and World Report, the NYSE, the Nasdaq, The Motley Fool and Benzinga. He lives in Vancouver, Canada and is an avid watch collector.

Stephanie Steinberg

BLUEPRINT

Stephanie Steinberg has been a journalist for over a decade. She has served as a health and money editor at U.S. News and World Report, covering personal finance, financial advisors, credit cards, retirement, investing, health and wellness and more. She founded The Detroit Writing Room and New York Writing Room to offer writing coaching and workshops for entrepreneurs, professionals and writers of all experience levels. Her work has been published in The New York Times, USA TODAY, Boston Globe, CNN.com, Huffington Post, and Detroit publications.

Farran Powell

BLUEPRINT

Farran Powell is the lead editor of investing at USA TODAY Blueprint. She was previously the assistant managing editor of investing at U.S. News and World Report. Her work has appeared in numerous publications including TheStreet, Mansion Global, CNN, CNN Money, DNAInfo, Yahoo! Finance, MSN Money and the New York Daily News. She holds a BSc from the London School of Economics and an MA from the University of Texas at Austin. You can follow her on Twitter at @farranpowell.