Best Index Funds for Beginners in 2024: Top Picks Compared
Choosing your first index fund does not need to be complicated. For most beginners, a simple S&P 500 or total market index fund from Vanguard, Fidelity, or Schwab is all you need to build serious long-term wealth. This guide compares the best options with specific fund names, tickers, expense ratios, and who each is best for.
Disclaimer: This content is for educational purposes only. Past performance does not guarantee future results. Consult a financial advisor before investing.
What to Look for in an Index Fund
When evaluating index funds, focus on four things: the expense ratio (lower is always better), what index the fund tracks (broader is usually better for beginners), the minimum investment required, and the fund provider’s reputation and stability. Read What is an Index Fund? for foundational context before choosing.
Best S&P 500 Index Funds
Fidelity 500 Index Fund (FXAIX) — Expense ratio: 0.015%. No minimum investment. One of the lowest-cost S&P 500 index funds available. Ideal for Fidelity account holders. This is an excellent first index fund for most beginners.
Vanguard 500 Index Fund Admiral Shares (VFIAX) — Expense ratio: 0.04%. Minimum investment: $3,000. The original S&P 500 index fund from the company that invented index investing. Excellent choice for those who can meet the minimum.
Vanguard S&P 500 ETF (VOO) — Expense ratio: 0.03%. No minimum investment (buy one share or fractional shares). ETF version of Vanguard’s S&P 500 fund. Available at any brokerage.
Schwab S&P 500 Index Fund (SWPPX) — Expense ratio: 0.02%. No minimum investment. Excellent choice for Schwab account holders.
iShares Core S&P 500 ETF (IVV) — Expense ratio: 0.03%. No minimum. Available at all brokerages. One of the most liquid S&P 500 ETFs available.
Best Total Market Index Funds
Total market funds cover the entire US stock market — not just the 500 largest companies but thousands of companies of all sizes. This provides slightly more diversification than an S&P 500 fund.
Fidelity ZERO Total Market Index Fund (FZROX) — Expense ratio: 0.00%. Zero expense ratio. No minimum investment. Only available at Fidelity but exceptional value.
Vanguard Total Stock Market ETF (VTI) — Expense ratio: 0.03%. No minimum. Covers the entire US stock market. One of the most popular index funds in the world.
Schwab Total Stock Market Index Fund (SWTSX) — Expense ratio: 0.03%. No minimum. Excellent option for Schwab account holders.
Best International Index Funds
Adding international exposure diversifies your portfolio beyond US markets. Many advisors recommend holding 20 to 40% of your equity allocation in international funds.
Vanguard Total International Stock ETF (VXUS) — Expense ratio: 0.07%. Covers developed and emerging markets outside the US. Excellent diversification tool.
Fidelity International Index Fund (FSPSX) — Expense ratio: 0.035%. No minimum. Covers developed international markets.
Best Bond Index Funds for Beginners
Vanguard Total Bond Market ETF (BND) — Expense ratio: 0.03%. Covers the entire US investment-grade bond market. The most commonly recommended bond fund for individual investors.
Fidelity US Bond Index Fund (FXNAX) — Expense ratio: 0.025%. No minimum. Excellent bond index fund for Fidelity account holders.
The Simplest Beginner Portfolio
For most beginners, a two-fund or three-fund portfolio is ideal. Two-fund: 80% VTI or FZROX (US total market) + 20% VXUS (international). Three-fund: 60% US total market + 20% international + 20% BND (bonds). This simple combination provides global diversification at minimal cost. Read our guide on The Three Fund Portfolio for Beginners for a detailed setup guide.
Conclusion
The best index fund for a beginner is simply the lowest-cost fund tracking the broadest index that is available at your chosen brokerage. Start with one fund — an S&P 500 or total market fund — and add complexity only if it serves a clear purpose. Continue with How to Start Investing in Index Funds and Index Funds vs ETFs.