More money is indexed to the S&P 500 than to any other benchmark. With some 49 S&P 500 Index funds available with 145 different share classes, picking the best might seem like a daunting task. It turns out, however, that only a handful of these funds are true stand-outs.
The first thing to consider when looking for a good S&P 500 Index fund is its size. Passive fund managers differ from active managers in this regard. Active managers want to remain nimble so that they can easily implement their investment ideas without causing an inordinate market impact in the securities they wish to trade. In fact, active managers often consider closing to new investors to keep assets at reasonable levels (and perhaps add a bit of exclusivity to their funds).
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Michael Rawson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.