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The Best US Stock Index Funds

Their prices are very much right.

Illustrative photograph of John Rekenthaler, Vice President of Research for Morningstar.
Securities In This Article
SPDR® Portfolio S&P 600™ Sm Cap ETF
Fidelity ZERO Large Cap Index
Vanguard S&P 500 ETF
Fidelity ZERO Extended Market Index
Vanguard Total Stock Mkt Idx Adm

3 Varieties of Stock Index Funds

I confess, my headline exaggerates. I cannot identify all the best US stock index funds because there are 1,437 such offerings, many of which replicate obscure benchmarks. For example, Amplify Cash Flow Dividend Leaders ETF COWS invests in the Kelly US Cash Flow Dividend Leaders Index, while iShares US Small Cap Value Factor ETF SVAL duplicates the Russell 2000 Focused Value Select Index. Researching the entire inventory would be a yearlong project.

This article instead addresses the three most common versions of US stock index funds:

  1. S&P 500
  2. Total market
  3. Small company

Not only can those funds be evaluated en masse, but they also contain more assets than the rest of the field combined. The low-hanging fruit is by far the heaviest.

S&P 500 Funds

This species of index fund is the most homogeneous. An S&P 500 fund is an S&P 500 fund. They all own the same issues. Such funds are almost pure commodities, distinguished first by their costs and secondarily by their tracking errors, which represent the amount by which their returns diverge from that of the index.

I write “secondarily” because while tracking error is theoretically important, as the point of buying an index fund is to match the benchmark’s performance, in practice the leading S&P 500 funds easily achieve that goal. Smaller funds sometimes miss the mark, but not those sponsored by the major providers.

The table below contains all retail S&P 500 funds with a five-year track record that have annual expense ratios of less than 0.05%. You can pay more than that, but why? I eliminated both institutional funds and share classes that can be used only within 401(k) plans. I had planned on showing each fund’s annual tracking error, but as all are less than 2 basis points, I saw no point in doing so. If you want the S&P 500, each fund named below will provide just that.

Best S&P 500 Funds

Expense Ratio %
Fidelity 500FXAIX0.02
Schwab S&P 500SWPPX0.02
Vanguard S&P 500 ETFVOO0.03
iShares Core S&P 500 ETFIVV0.03
SPDR Portfolio S&P 500 ETFSPLG0.02
Vanguard 500 AdmiralVFIAX0.04

Two comments. First, while SPDR Portfolio S&P 500 ETF’s SPLG internal tracking error was modest, the fund in practice periodically drifts from the index because its market price deviates from its net asset value. Second, Fidelity ZERO Large Cap FNILX is also worth considering. I omitted that fund from the chart because it does not follow the S&P 500, electing instead for an in-house index. However, as Fidelity blares, the fund levies no fees whatsoever, which is an appealing feature.

Total Market Funds

This analysis is somewhat messier. These funds use various indexes rather than a single standard. Selecting the best option thus involves selecting the best benchmark, which cannot be done. First, perhaps 10 people on the planet can correctly explain the distinctions between the various total market US stock indexes. Second, while determining the past’s winner is easy, none of those 10 experts (or anybody else) can foretell which benchmark will triumph in the future.

The good news is that total market funds are reliably cheap. Whereas investment-management companies often launch S&P 500 funds perfunctorily, to fill a gap in their product lineups, only organizations that are serious about indexing provide total market funds. Consequently, their prices are consistently attractive.

The next table lists each company’s lowest-cost retail offering, save for those of T. Rowe Price TRP, which is moderately higher in price. Also displayed is each fund’s tracking error. The latter is considerably larger than with the S&P 500 funds, although still modest in the grand scheme of things.

Best Total Market Funds

Tracking Error
Expense Ratio %
Fidelity ZERO Total MarketFZROX0.050.00
Fidelity Total MarketFSKAX0.150.02
iShares Core S&P Total US Stock Market ETFITOT0.040.03
Schwab Total Stock MarketSWTSX0.170.03
Vanguard Total ETFVTI0.050.03
Vanguard Total AdmiralVTSAX0.050.04

Not much to say here. Schwab Total Stock Market SWTSX has a higher tracking error, for those worried about such things. And it’s hard to see why one would buy Fidelity Total Market FSKAX rather than its zero-cost sibling. Those are quibbles, though. Each of these funds is perfectly fine.

Small Company Funds

With this group, I can supply the least insight, because small company index funds use a bewildering number of benchmarks. For example, the 75 index funds within the small-blend Morningstar Category use 45 different yardsticks. Forget about 10 people understanding such distinctions! The correct number is zero. Forget also about assessing those funds’ tracking errors. One of these days, an unusually patient researcher might hunt down the returns for each of those 45 indexes and conduct that study. Not this day, not this researcher.

That said, I will incorporate some analysis into the “best funds” table. Investing based solely on expense ratios is appropriate for S&P 500 funds and is largely valid for total market funds. However, as the characteristics of small company indexes vary substantially, it makes sense to consider performance. I would not select a small company index fund because of its past results, but I would limit my search to low-cost funds that employ a previously successful benchmark.

In that spirit, here are the six small company US index funds available to the general public that have annual expense ratios of less than 0.10% and have recorded Sharpe ratios over the past five years that are above the small company index fund average of 0.45. (With Sharpe ratios, higher scores are better.)

Best Small Company Funds

(Sharpe Ratio % from January 2019 to December 2023)

Sharpe Ratio %
Expense Ratio %
Fidelity ZERO Extended MarketFZIPX0.500.00
SPDR Portfolio S&P 600 ETFSPSM0.490.03
Schwab US Small-Cap ETFSCHA0.460.04
Vanguard SmallCap Index AdmiralVSMAX0.510.05
Vanguard Small-Cap ETFVB0.510.05
iShares Core S&P Small-Cap ETFIJR0.470.06


There’s not much left for me to say about US equity indexes, because after these three broadly defined groups, the pickings become slim. Each fund does something a bit different, which makes comparisons odious. However, if demand warrants, I will publish two sequels to this article examining 1) international stocks and 2) domestic bonds. If you are interested in either, or both, feel free to let me know.

The author or authors own shares in one or more securities mentioned in this article. Find out about Morningstar’s editorial policies.

The opinions expressed here are the author’s. Morningstar values diversity of thought and publishes a broad range of viewpoints.

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About the Author

John Rekenthaler

Vice President, Research
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John Rekenthaler is vice president, research for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc.

Rekenthaler joined Morningstar in 1988 and has served in several capacities. He has overseen Morningstar's research methodologies, led thought leadership initiatives such as the Global Investor Experience report that assesses the experiences of mutual fund investors globally, and been involved in a variety of new development efforts. He currently writes regular columns for and Morningstar magazine.

Rekenthaler previously served as president of Morningstar Associates, LLC, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. During his tenure, he has also led the company’s retirement advice business, building it from a start-up operation to one of the largest independent advice and guidance providers in the retirement industry.

Before his role at Morningstar Associates, he was the firm's director of research, where he helped to develop Morningstar's quantitative methodologies, such as the Morningstar Rating for funds, the Morningstar Style Box, and industry sector classifications. He also served as editor of Morningstar Mutual Funds and Morningstar FundInvestor.

Rekenthaler holds a bachelor's degree in English from the University of Pennsylvania and a Master of Business Administration from the University of Chicago Booth School of Business, from which he graduated with high honors as a Wallman Scholar.

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