Index funds are one of the safest and most affordable ways to invest in the stock market. Instead of a traditional investment into a single company, investing in an index fund is like investing in the market.
While funds are generally a safe and practical way to invest, all funds are created equal. The top 10 best index funds for 2023 are detailed in this article.
10 Best Index Funds Of 2023
There are a lot of index funds, and knowing what kind of fund to invest in is essential if someone wants to make sure the portfolio is diverse. There are many funds that specialize in certain types of businesses. In contrast, other indexes care more about the size of the business and how much impact they have on the economy than what they do or how they make money.
Having a mix of various index funds can help analyze rough dips in the market while also minimizing the time spent customizing the investment portfolio.
It is important to note that index funds are usually more affordable than other investment options. However, looking for a low-cost fund is still important to ensure no loss in investment profits because of excessive fees on the account or transactions.
1. Fidelity ZERO Large Cap Index (FNILX)
The Fidelity ZERO Large Cap Index fund is one of the best and most affordable funds to invest anywhere. The ZERO in the name comes from the fact that it’s a zero-expense fund.
This index fund is mainly designed for people who already have accounts with the investment company. Fidelity’s Zero Cap Index is similar to the S&P 500 for the differences to be highly academic. However, Fidelity avoids licensing fees for themselves and their investors.
2. Vanguard Total World Stock ETF (VT)
The Vanguard Total World Stock cannot meet Fidelity’s ZERO expense ratio but considering more index funds have at least a modest expense ratio. Vanguard’s TWS is a bit more expensive than other alternatives, at .07%, but that is still a reasonable expense ratio for most purposes.
The most significant advantage of the VT is that it is a large index fund that includes a diverse portfolio of different companies and requires no research into US markets vs. international markets because the fund has a combination of both.
3. Schwab S&P 500 Index Fund (SWPPX)
The Schwab S&P 500 is one of the best-known index funds in the world and can trace its history back longer than many funds. That’s important because if anyone is looking for a proven fund with a lot of data backing its effectiveness that performs predictably in different market conditions, this is a good option.
The overall performance of the fund is not significantly more volatile than other index funds. One of the issues with small indexes is that they can frequently suffer from economic downturns more significantly than larger funds because there are fewer companies to help protect the fund.
4. Shelton NASDAQ-100 Index Direct (NASDX)
If looking for a smaller index fund that is still relatively representative of the market, the Shelton NASDAQ-100 is a reasonable option. This fund eliminates financial companies from the index, which means there won’t be a compounded downturn from a financial company’s fortunes changing when the market goes through a correction. However, it is limited to the 100 top companies in the market, hugely a tech company group.
5. Vanguard Total Stock Market ETF (VTI)
The Vanguard Total World Stock index fund tracks each and every traded company. It started trading actively in 2001 and has performed as expected since the fund launched.
This index fund also has a low expense ratio of just 0.03%. Hence, for every $10,000 traded every year, this fund would have a total cost of $3. That is one of the more generous offerings aside from Fidelity’s line of ZERO index funds.
6. Vanguard Growth ETF (VUG)
Another index fund with a low expense ratio of just 0.04%, the Vanguard Growth ETF, is a fund that is particularly targeted towards companies that tend to do a little better than the market average and companies that weather market shocks better than their competition all time.
7. SPDR S&P Dividend ETF (SDY)
The SPDR S&P Dividend is one of the highly popular index funds and one of the most active funds. It is a large fund with millions in assets, and the fund makes trades on 100 million daily shares.
If looking for a more active fund with some advantages of a managed fund with the security and lower costs of an index fund, this is a good option.
8. Invesco QQQ Trust ETF (QQQ)
The Invesco QQQ Trust ETF, like a couple of the other index funds, tracks the NASDAQ-100, which means that it is a proper way to track some of the top-performing companies in the market. It is also an excellent index used to follow the performance of companies that tend to out-perform the general market.
9. Vanguard S&P 500 ETF (VOO)
If looking for a fund that tracks one of the best-known stocks and markets but comes with a low expense ratio and is easy to invest in, Vanguard has another good fund offering that does precisely that.
Like any fund with S&P 500 in the name, this fund tracks with the larger version of the S&P, which means it is a little more diverse and varied than funds that track the S&P 100. However, this is still a slightly more expensive option than Fidelity ZERO’s fund of the same nature.
10. Vanguard Real Estate ETF (VNQ)
This fund is not directly tied to a shares market; this index is instead tied to REITs. Since these companies buy property of a wide variety of, performance is more tied to the housing market than the stock market.
Investing in real estate is getting a lot more common currently, and getting in now, vs. when real estate investing is more common, could be a good thing. The expense ratio on this index is reasonable, a little higher than some other funds, but far from the highest.
Related: Top 10 Best VPN Services
Conclusion
Many financial experts say that index funds can be good for long-term investments. They are reasonable and affordable solutions for getting a diverse portfolio that offers dependable growth by tracking an index.
Ensure to perform due diligence and research different funds before determining the best funds. Professional financial advisors can also be extremely helpful in deciding where to invest
