Best S&P 500 Index Funds in 2025: Low Fees & Top Liquidity Options

When it comes to S&P 500 index funds, FXAIX and SPY stand out as top choices for cost efficiency and liquidity respectively.

The S&P 500 Index represents 500 of the largest U.S. companies by market capitalization, covering about 80% of the U.S. equity market. It is widely recognized as the premier benchmark for large-cap U.S. stocks and often serves as a proxy for the overall market. Leading companies in this index include:

• Microsoft (MSFT)
• Apple (AAPL)
• Amazon (AMZN)
• Alphabet (GOOGL)
• Tesla (TSLA)

Many mutual funds and ETFs are designed to replicate the performance of the S&P 500 due to its popularity as an indicator of U.S. equity market health. ETFs differ from mutual funds by trading on exchanges throughout the day, similar to stocks.

Below is an updated review of the top S&P 500 index funds as of early 2024, highlighting the lowest fee options and those with the best liquidity.

Key Insights

• Index investing continues to grow, with passive funds often outperforming active funds at lower costs.
• The S&P 500 remains the most tracked benchmark index among investors.
• It serves as a reliable barometer for large-cap U.S. equities.
• Consider funds from Fidelity, Schwab, Vanguard, and State Street for solid index fund options.
• State Street offers a highly liquid ETF that tracks the S&P 500 effectively.

Lowest Fee S&P 500 Index Fund: Fidelity 500 Index Fund (FXAIX)

FXAIX is a mutual fund that offers one of the lowest expense ratios available, which is critical for maximizing long-term returns when tracking the S&P 500.

• Expense Ratio: 0.015%
• 2023 Return: Approximately -18.13%
• Yield: 1.33%
• Assets Under Management (AUM): $373.8 billion
• Minimum Investment: $0
• Inception Date: February 17, 1988 (Share Class since May 4, 2011)
• Provider: Fidelity Investments

Second Lowest Cost Option: Schwab S&P 500 Index Fund (SWPPX)

Schwab’s SWPPX fund aims to mirror the total return of the S&P 500 by investing primarily in the index’s constituent stocks.

• Expense Ratio: 0.02%
• 2023 Return: Approximately -18.13%
• Yield: 1.35%
• AUM: $60.8 billion
• Minimum Investment: $0
• Inception Date: May 19, 1997
• Provider: Charles Schwab

Another Low-Cost Choice: Vanguard 500 Index Fund Admiral Shares (VFIAX)

Vanguard pioneered index funds and continues to manage the largest S&P 500 index fund by assets, offering a reliable option for investors.

• Expense Ratio: 0.04%
• 2023 Return: Approximately -18.15%
• Yield: 1.58%
• AUM: $792.6 billion
• Minimum Investment: $3,000
• Inception Date: November 13, 2000
• Provider: Vanguard

Important Reminder

Before investing in any mutual funds or ETFs, conduct thorough research and consider consulting a trusted financial advisor to ensure the investment aligns with your financial goals.

State Street S&P 500 Index Fund Class N (SVSPX)

State Street’s SVSPX is another solid option closely tracking the S&P 500, though it requires a higher minimum investment.

• Expense Ratio: 0.16% (net)
• 2022 Return: 28.54% (latest available)
• Yield: 1.76%
• AUM: $1.3 billion
• Minimum Investment: $10,000
• Inception Date: December 30, 1992
• Provider: State Street

Most Liquid S&P 500 ETF: SPDR S&P 500 ETF (SPY)

SPY is a highly liquid ETF and one of the most actively traded funds tracking the S&P 500. While not the cheapest, its liquidity makes it ideal for frequent traders looking to minimize transaction costs.

• Expense Ratio: 0.09%
• 2023 Return: Approximately 18.14%
• Yield: 1.56%
• AUM: $382.1 billion
• Minimum Investment: Price of one share (~$464.68)
• Inception Date: January 22, 1993
• Provider: State Street

This information is for educational purposes and does not constitute financial advice. Always verify data and consult a financial professional before making investment decisions. Market conditions can change rapidly, impacting fund performance and suitability.

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