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Best index funds to invest in for February 2023


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Fidelity ZERO Large Cap Index (FNILX)

 

The Fidelity ZERO Large Cap Index mutual fund is part of the investment company’s foray into mutual funds with no expense ratio, thus its ZERO moniker.

 

The fund doesn’t officially track the S&P 500 – technically it follows the Fidelity U.S. Large Cap Index – but the difference is academic.

The real difference is that investor-friendly Fidelity doesn’t have to cough up a licensing fee to use the S&P name, keeping costs lower for investors.

 

  • Expense ratio: 0 percent. That means every $10,000 invested would cost $0 annually.
  • Who is it good for?: Great for investors looking for a broadly diversified index fund at a low cost to serve as a core holding in their portfolio.
  • Where to get it: The fund can be purchased directly from the fund company or through most online brokers.
     
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Vanguard S&P 500 ETF (VOO)

As its name suggests, the Vanguard S&P 500 tracks the S&P 500 index, and it’s one of the largest funds on the market with hundreds of billions in the fund.

This ETF began trading in 2010, and it’s backed by Vanguard, one of the powerhouses of the fund industry.

  • Expense ratio: 0.03 percent. That means every $10,000 invested would cost $3 annually.
  • Who is it good for?: Great for investors looking for a broadly diversified index fund at a low cost to serve as a core holding in their portfolio.
  • Where to get it: The fund can be purchased directly from the fund company or through most online brokers.
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SPDR S&P 500 ETF Trust (SPY)

The SPDR S&P 500 ETF is the granddaddy of ETFs, having been founded all the way back in 1993. It helped kick off the wave of ETF investing that has become so popular today.

With hundreds of billions in the fund, it’s among the most popular ETFs. The fund is sponsored by State Street Global Advisors — another heavyweight in the industry — and it tracks the S&P 500.

  • Expense ratio: 0.095 percent. That means every $10,000 invested would cost $9.50 annually.
  • Who is it good for?: Great for investors looking for a broadly diversified index fund at a low cost to serve as a core holding in their portfolio.
  • Where to get it: The fund can be purchased directly from the fund company or through most online brokers.
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What Is an Index Fund?

An index fund is a type of investment fund with a portfolio built to track or match financial market index components, such as the Standard & Poor's 500 Index (S&P 500).

Basically, an index is a standard method to track the performance of groups of assets. It typically measures the performance of a basket of securities aimed to duplicate a specific area of the market.

These index funds are passively managed, which means they are not actively managed by a portfolio manager making the investment decisions. Rather, they only aim to track the performance of their target index as closely as possible.

Index funds also intend to be the market with an autopilot approach that holds the same securities in a similar proportion as the index.

Index funds are an excellent way to simplify your investing while also reducing your costs. You can buy index funds through your individual retirement account (IRA) or 401(k), or also through an online brokerage account.

According to Warren Buffet, Berkshire Hathaway’s Chairman and CEO, one of the wealthiest men in the world, it makes more sense for an average investor to buy all of the S&P 500 investments at the low cost that an index fund offers rather than choosing individual stocks for investment.

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  • 2 weeks later...

iShares Core S&P 500 ETF (IVV)

Overview: The iShares Core S&P 500 ETF is a fund sponsored by one of the largest fund companies, BlackRock. This iShares fund is one of the largest ETFs and it tracks the S&P 500.

With an inception date of 2000, this fund is another long-tenured player that’s tracked the index closely over time.

Expense ratio: 0.03 percent. That means every $10,000 invested would cost $3 annually.

Who is it good for?: Great for investors looking for a broadly diversified index fund at a low cost to serve as a core holding in their portfolio.

Where to get it: The fund can be purchased directly from the fund company or through most online brokers.

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