News & Analysis

What are the best performing index funds?

07 Sep 2021 | by: Patricia Miller

What are the best performing index funds?

Index funds are popular with investors owing to their promise of ownership of a wide variety of stocks, more portfolio diversification and lower exposure to risk, usually at a low price. Many investors, in particular those that are new to the world of investing, opt for index funds as they deem them to be superior to individual stocks.

An index fund is a type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the S&P 500. Index funds are typically considered to be ideal for core portfolio holdings for retirement accounts, such as individual retirement accounts (IRAs) and 401 accounts.

Best performing index funds for 2021

If you are considering adding an index fund to your portfolio, here are five of the best performing index funds for 2021:

  • Fidelity ZERO Large Cap Index
  • Vanguard S&P 500 ETF
  • SPDR S&P 500 ETF Trust
  • iShares Core S&P 500 ETF
  • Schwab S&P 500 Index Fund

Fidelity ZERO Large Cap Index (FNILX)

The Fidelity ZERO Large Cap Index is a mutual fund with no expense ratio. This means that the expense ratio is 0%, so every $10,000 invested would cost $0 annually. The fund doesn’t officially track the S&P 500, it technically follows the Fidelity U.S. Large Cap Index.

Given that Fidelity does not have to pay licensing fees to use the S&P name, this helps keep costs low for investors making this index an investor-friendly one. At the time of writing, the share price is $16.10 and the YTD Return is 17.17%

Vanguard S&P 500 ETF (VOO)

As the name would suggest, the Vanguard S&P 500 ETF tracks the S&P index and is one of the largest funds on the market with hundreds of billions in the fund. The ETF started trading in 2010 and is backed by one of the powerhouses of the fund industry, Vanguard. Unlike the Fidelity Zero Large Cap Index, it has an expense ratio of 0.03%, meaning that every $10,000 invested would cost $3 annually.

Currently the share price sits at $411.87 compared to just $339.03 at the beginning of the year, showing a 21.48% increase.

SPDR S&P 500 ETF Trust (SPY)

As one of the oldest ETFs on the market, the SPDR S&P 500 ETF Trust was founded back in 1993 and paved the way for the wave of ETF investing that is popular today. The fund tracks the S&P 500 and is one of the most popular ETFs. Sponsored by State Street Global Advisors, the SPDR S&P 500 ETF Trust is one of the main players.

It has the highest expense ratio of all the index funds featured in our top five, but is still only at 0.09%. Which would cost $9 annually for every $10,000 invested. Back in January 2021 share prices were $368.79 and today they have grown by 21.47% to $447.97.

iShares Core S&P 500 ETF (IVV)

The iShares Core S&P 500 ETF fund is sponsored by one of the largest fund companies, BlackRock. It is no surprise that The iShares Core S&P 500 ETF is one of the largest ETFs and tracks the S&P 500. Another long-term player, it was founded in 2000 giving extra confidence to investors.

Just as the Vanguard ETF, the iShares Core S&P 500 ETF has an expense ratio of 0.03%, meaning that every $10,000 invested would cost $3 annually. Today’s share price is $449.97, a 21.54% increase on its price of $370.22 back at the beginning of the year.

Schwab S&P 500 Index Fund (SWPPX)

With a strong record dating back to 1997, the Schwab S&P 500 Index Fund is on the smaller side of some of the larger funds we have mentioned, but that is not a concern for investors. Sponsored by Charles Schwab, one of the most respected names in the industry, adds extra weight to this fund for investors.

Renowned for making investor-friendly products, the Schwab S&P 500 Index Fund boasts a low expense ratio of 0.02%, meaning that every $10,000 invested would cost $2 annually. Opening the year with a share price of $56.57, the Schwab S&P 500 Index Fund has shown a steady growth of 22.36% and now sits at $69.22.

Valuethemarkets.com, Digitonic Ltd (and our owners, directors, officers, managers, employees, affiliates, agents and assigns) are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

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