The Standard & Poor’s 500 Index, or simply S&P 500, is a market-capitalisation-weighted index of 500 large-cap U.S. firms that account for 80% of the country’s stock market capitalization. It is usually recognized as the most accurate indicator of large-cap US equities, and it is frequently referred to as “the market” because it includes stocks from all market sectors. Microsoft Corp. (MSFT), Apple Inc. (AAPL), Inc. (AMZN), Alphabet Inc. (GOOGL), and Facebook Inc. are among the S&P 500’s major constituents (FB).

Due to the S&P 500’s popularity as a barometer of U.S. equity markets, many mutual funds and exchange-traded funds have stock portfolios that are meant to mimic those of the index (ETFs). The latter sort of fund is different from standard mutual funds in that it is listed on exchanges and trades like regular stock throughout the day.

The top S&P 500 index funds are listed below, with one having the lowest costs and the other having the most liquidity. The information below is current as of July 3, 2021.

Over the last decade, index investing has gained traction, with passive funds frequently outperforming their active counterparts at a lower cost.
The S&P 500 has long been the most closely followed benchmark index among index investors.
We’ll take a look at a handful of the best-rated, low-cost S&P 500 index funds in this article.

FXAIX is an exchange-traded fund. Because index-tracking funds track the index’s performance, one of, if not the most important, determinants of long-term returns is how much the fund costs in fees.

0.015 percent expense ratio
Return for 2020: 18.4 percent
1.31 percent yield
$343.3 billion in assets under management
$0 is the bare minimum investment.
Date of Inception: February 17, 1988 (Share Class Inception Date: May 4, 2011)
Fidelity Investments is the issuing company.

The S&P 500 index fund from Schwab aims to mirror the S&P 500 Index’s total return. The fund typically invests at least 80% of its net assets in these companies (including any borrowings for investing purposes); however, the actual ratio is typically much higher. It will normally try to duplicate the index’s performance by assigning each stock the same weight as the index.

0.02 percent Expense Ratio
Return for 2020: 18.39%
1.57 percent yield
$62.2 billion in assets under management
$0 is the bare minimum investment.
Inception Date: 19 May 1997
Charles Schwab is the issuing company.

With roughly half a trillion dollars under administration in its Vanguard 500 Index Fund, Vanguard was the first index fund and still has the most assets under management. The goal of the investment is to match the performance of a benchmark index that tracks the investment return of large-capitalization firms. The fund uses an indexing investment strategy to mirror the Standard & Poor’s 500 Index’s performance.

0.04 percent Expense Ratio
Return for 2020: 18.25%
1.33 percent yield
$739.5 billion in assets under management
$3,000 is the minimum investment.
Inception 13th of November, 2000
Vanguard is the issuing company.

State Street’s product is also in the running, as it closely reflects the S&P 500 Index. This fund, on the other hand, demands a minimum investment of $10,000.

0.16 percent expense ratio
Return for 2020: 18.59 percent
0.94 percent yield
$1.6 billion in assets under management
$10,000 is the minimum investment.
Date of Inception: December 30, 1992
State Street is the issuing company.

SPY is an exchange-traded fund, not a mutual fund, and it isn’t even the cheapest S&P 500 ETF. However, it is the most liquid S&P 500 fund. Liquidity measures how easy it is to trade an ETF, with higher liquidity implying cheaper trading costs. People who wish to own ETFs for a long time aren’t concerned with trading expenses, but if you want to trade ETFs regularly, you should search for funds with high liquidity to reduce trading costs.

2020 18.23% return on investment
0.095 percent expense ratio
Dividend Yield: 1.3 percent every year
$378.7 billion in assets under management
Date of Inception: January 22, 1993
State Street is the issuing company.

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