https://money.usnews.com/investing/funds/slideshows/best-low-cost-index-funds9 Best Low-Cost Index Funds to Own
In investing, there’s one surefire way to keep more of your money, and that’s paying less for an investment vehicle.
Low-cost index funds offer investors a diversified mix of holdings and help them retain more money so their earnings can compound faster. As exchange-traded funds become more popular, it's helped bring down investment costs. Many of the top ETF index funds that follow the S&P 500 have costs under 0.1%, meaning they cost $10 for every $10,000 invested.
But investors don’t have to stick with broader market to find the best index funds, since many sector and niche funds are available at cheap prices. Here are nine top low-cost index funds.
1. Vanguard Total Stock Market ETF (ticker: VTI). When it comes to core holdings and domestic equities, Morris Armstrong, a fee-only registered investment advisor in Cheshire, Connecticut, says he favors VTI. It is a market-cap weighted index that follows the CRSP U.S. Total Market, holding more than 3,500 stocks, which range from small- to large-cap stocks.
VTI also has an enticing expense ratio: 0.03%. Core funds like VTI will closely track the index and give investors the market return, rather than try to hit home runs, he says. “A core [fund] should be solid and something which you can build upon, whether your home or body or portfolio,” he says.
2. Vanguard Growth ETF (VUG). Chuck Self, chief investment officer at iSectors in Appleton, Wisconsin, likes VUG for investors seeking broad exposure to U.S. large-cap growth firms. “Since this fund is a full replication of the CRSP U.S. Large Cap Growth Index, the companies are larger, more profitable and have greater growth characteristics than other growth indices,” he says.
VUG selects holdings based on six growth factors, including expected long- and short-term growth in earnings per share and return on assets. With a fee of 0.04% and a focus on growth, “it is the best large-cap-growth index fund available,” Self says. – Debbie Carlson
