An index fund’s job is simple: track a market benchmark as closely as possible, at the lowest possible cost, without trying to beat it. Because passive management removes the cost of stock-picking, index funds routinely outperform actively managed funds over long periods once fees are accounted for. The real decision isn’t which fund will perform best — nearly identical funds tracking the same index perform almost identically — it’s which combination of cost, structure, and account minimum fits you.
Quick Verdict
| Category | Winner |
|---|---|
| Lowest-cost S&P 500 fund | Fidelity FXAIX (0.015% expense ratio) |
| Most widely available S&P 500 ETF | Vanguard VOO / iShares IVV (0.03%) |
| Best for total market exposure | Vanguard VTI / Fidelity FSKAX |
| Best for zero minimum investment | Fidelity ZERO funds (FZROX, FZILX) |
| Best for international diversification | Vanguard VXUS |
| Best for reducing mega-cap concentration | Invesco RSP (equal-weight S&P 500) |
S&P 500 Index Funds: The Core Holding
Several funds track the S&P 500 essentially identically, so the differences that matter come down to expense ratio and where you can buy them:
- FXAIX (Fidelity): 0.015% expense ratio, among the cheapest S&P 500 funds available. Available at Fidelity and, in most cases, transferable to other brokers as a mutual fund holding.
- VOO (Vanguard): 0.03% expense ratio, the largest S&P 500 ETF by assets. As an ETF, it’s available at essentially every broker.
- IVV (iShares): 0.03% expense ratio, functionally similar to VOO with slightly different fund structure.
- SWPPX (Schwab): 0.02% expense ratio, available even without a Schwab account through most brokers.
For every $10,000 invested, the difference between a 0.015% and a 0.03% expense ratio works out to about $1.50 a year — genuinely negligible for most investors. The more meaningful decision factor is usually which broker you already use, since that determines whether a mutual fund (FXAIX, SWPPX) or an ETF (VOO, IVV) fits more naturally into your account.
One Notable Alternative: Equal-Weight S&P 500
A standard S&P 500 fund weights companies by market capitalization, meaning the largest companies dominate the fund’s performance — as of 2026, the top 10 holdings represent close to 40% of the index. Invesco’s RSP takes a different approach, weighting all 500 companies equally, which reduces concentration risk in mega-cap technology stocks at the cost of a higher expense ratio and a return profile that can diverge meaningfully from the standard index in either direction.
Total Market vs. S&P 500: Do You Need Both?
The S&P 500 covers roughly 80% of U.S. stock market value by including only large-cap companies. A total market fund like Vanguard’s VTI or Fidelity’s FSKAX extends coverage to mid-cap and small-cap companies as well, for a nearly identical expense ratio. The practical difference in long-term returns between the two has historically been small, since large-caps dominate both funds’ performance, but a total market fund technically offers broader diversification for essentially no added cost — there’s little reason to choose the narrower S&P 500-only fund unless you specifically want to exclude smaller companies.
Don’t Forget International Exposure
A common blind spot for U.S. investors is that both the S&P 500 and total market funds hold exclusively U.S. companies. Vanguard’s VXUS (Total International Stock ETF, 0.07% expense ratio) is the standard complement, giving exposure to developed and emerging markets outside the U.S. Many target-date and “three-fund portfolio” strategies pair a U.S. total market fund with an international fund and a bond fund specifically to avoid this concentration.
Zero-Fee Funds: The Catch Worth Knowing
Fidelity’s ZERO fund lineup (FZROX for total market, FZILX for international) charges a literal 0.00% expense ratio — technically the cheapest option available. The trade-off: these are proprietary Fidelity funds that cannot be transferred in-kind to another broker. If you ever move your account elsewhere, you’d need to sell the position first, which can trigger a taxable event in a non-retirement account. Inside an IRA or 401(k), that’s a non-issue.
Which One Should You Choose?
For most long-term investors, the specific fund matters far less than starting and staying consistent. Any of the major S&P 500 or total market funds listed here — regardless of the one- or two-basis-point difference in expense ratio — will deliver essentially the same result over decades. The more useful decision is structural: pick a fund available at your existing broker, pair it with an international fund for full diversification, and avoid chasing marginal fee differences that amount to a few dollars a year on a typical portfolio.
Disclosure: This article is for educational purposes only and does not constitute financial or investment advice. We are not licensed financial advisors. Expense ratios and fund data reflect publicly available information as of 2026 and are subject to change — verify current figures directly with each fund provider before investing. Some links on this page may be affiliate links.
Last reviewed: July 2026.