Best Index Funds for 2025 Investing

The Fidelity funds I’m about to detail all sport minimal turnover, which makes them very tax-efficient investments for taxable brokerage accounts. Today, this premier mutual fund company has more than $16 trillion in assets under administration thanks in large part to the success of its talented fund managers. Most notably, that includes Peter Lynch, the longtime manager of the Fidelity Magellan Fund (FMAGX) who averaged an incredible 29.2% per year between 1977 and 1990.

Shelton Nasdaq-100 Index Investor (NASDX)

Companies that don’t meet certain diversity metrics are also excluded. The $3,000 minimum initial investment for Vanguard Admiral Shares is higher than most other options on our list. Statistics or past performance is not a guarantee of the future performance of the particular product you are considering. Learn how to create a robust ESG portfolio focused on sustainability, ethics, and governance for long-term growth. Explore the features, benefits, and strategies of top robo advisors, simplifying investment for everyone. With hundreds of billions in the fund, it’s among the most popular ETFs.

Managed Volatility

The DSP Nifty Next 50 Index Fund belongs to the large-cap index category and has an asset size of Rs. 1,047 crore. It comes with an expense ratio of 0.25% and has generated an annual return of 17.62%. The fund tracks the Nifty Next 50, representing companies just below the Nifty 50 in size and influence. This makes it attractive for those who want exposure to potential future blue-chip stocks. As of early March 2025, the index fund’s largest concentrations were in industrials (19%), financials (18.9%), and healthcare (16.6%).

Evaluating Historical Performance

This fund tracks the performance of the Nasdaq-100 index, which includes 100 of the largest non-financial companies listed on the Nasdaq stock exchange. With an expense ratio of 0.20% and potential for high growth, this fund is a great way to capitalize on the rapid innovation and disruption in the tech sector. The Vanguard S&P 500 ETF, renowned for its impressive track record, is a primary contender for the best index funds in 2025. Tracking the S&P 500 index, the fund consists of large-cap U.S. stocks, offering exposure to major industry sectors. With a low expense ratio, it remains an attractive option for cost-conscious investors. Its diverse holdings, including stalwarts like Apple and Microsoft, offer stability with potential for growth.

VIG vs. VYM – Vanguard’s 2 Popular Dividend ETFs (Review)

This tamps down (and often eliminates) capital-gains distributions, which receive unfavorable tax treatment. This makes FXAIX an extremely tax-efficient option for taxable brokerage accounts. But considering about 85% of the world’s population lives in developing countries, investors who have a long-term focus and are comfortable with volatility seriously may want to consider investing in this fund.

• The Vanguard Real Estate Index Fund is the most popular REIT fund and seeks to track the MSCI US Investable Market Real Estate 25/50 Index.
• It is worth noting that while Fidelity Total International Index Fund does enjoy a Morningstar Gold medalist rating, a lot of that is shouldered by its dirt-cheap investment fee.
• I evaluated each fund’s historical performance, trading volumes and bid-ask spreads to ensure cost-effective trading.
• Japan is tops at 22% of assets, though you also get double-digit exposure to the U.K., France, and Germany.
• The price of almost everything we buy has gone up over the past few years, but index funds not only remain a source of stable low costs—they keep getting cheaper by the year!

Fidelity Short-Term Treasury Bond Index Fund

The real difference is that investor-friendly Fidelity doesn’t have to cough up a licensing fee to use the S&P name, keeping costs lower for investors. Any estimates based on past performance do not a guarantee future performance, and prior to making any investment you should discuss your specific investment needs or seek advice from a qualified professional. Our services include comprehensive financial planning, investment management, estate planning, taxes, and more! Schedule a call with Riley to discuss what you need, and what we can do for you. Every dollar you pay in expenses is a dollar that comes directly out of your returns. So, it is absolutely in your best interests to keep your expense ratios to an absolute minimum.

I’m usually a fan of Vanguard funds whenever possible, as they typically offer the lowest fees, so you’ll see many Vanguard index funds in the list below. Vanguard actually invented and introduced the first index fund in 1976. The abbreviation of each fund you see below is called the ticker symbol, used to quickly find the fund when placing an order through a broker. Systematic Investment Plans (SIPs) are widely used to invest in mutual funds, including top performers. However, returns depend on market movements, entry timing, and investment horizon. Fidelity’s S&P 500 Index Fund is a low-cost mutual fund that aims to closely mirror the returns and characteristics of the S&P 500 Index.

Top Performing Mutual Funds in India

The Motilal Oswal Nifty Smallcap 250 Index Fund falls under the small-cap index category with an asset base of Rs. 970 crore. It charges an expense ratio of 0.33% and has delivered annual returns of 22.16%. Whether it’s mastering cutting-edge strategies, uncovering actionable investment opportunities from influential leaders, or breaking down complex topics, our in-depth journalism has you covered. Become a Forbes member and gain Best index funds 2025 unlimited access to bold ideas shaking up industries, expert guides and practical investment advice that keeps you ahead of the market. VNQ tracks the MSCI US REIT Index, which provides exposure to a wide range of real estate investment trusts (REITs) in various property sectors. This flagship ETF tracks the S&P 500 index, providing exposure to 500 of the largest U.S. companies.

• That’s common for international funds, and it tends to result in dividend yields that are much bigger than U.S. large-cap funds—FTIHX’s yield is about double the S&P 500’s.
• One-year and three-year returns of the S&P 500 following rate cuts, often look impressive, except during recessions.
• At 0.1%, its expense ratio is relatively low, especially for a fund offering exposure to the companies with the most growth potential.
• The stocks of companies in emerging markets have historically underperformed compared to U.S. stocks.

In the past five years as of March 2025, the Schwab emerging market fund had annualized returns just shy of 5%. Meanwhile, the S&P 500 racked up annualized returns of about 17% during the same five-year period. Fidelity Total International Index tries to replicate the performance of the MSCI ACWI (All Country World Index) ex USA Investable Market Index. This market-cap weighted index is designed to provide exposure to stocks of all sizes across both developed (mature, slow-growth) and emerging (volatile but higher-growth) markets. America’s stock markets have been among the world’s most productive for decades on end. And if you believe in the U.S. economy’s ability to keep going strong, that will likely remain the case.

Anyone who says “you can’t have it all” clearly has never heard of “total market” products like the Schwab Total Stock Market Index Fund (SWTSX). Fidelity ZERO Large Cap Index doesn’t have a long track record, given that it launched in 2018. But it has beaten its category average and Morningstar index, on an average annual basis, over the trailing one-, three-, and five-year periods.

With an expense ratio of just 0.09% and a history of strong performance, this fund is a solid choice for investors seeking exposure to the US stock market. The iShares Core S&P 500 ETF is another top choice for investors seeking exposure to the US stock market. With an expense ratio of just 0.03% and a history of strong performance, this fund is a cost-effective way to invest in some of the biggest names in the market. SCHA is the optimal small-cap index choice for 2025, combining comprehensive market coverage with industry-leading cost efficiency. The fund’s thoughtfully designed methodology captures 1,757 small-cap companies while maintaining an average market cap of $2.1 billion, providing pure small-cap exposure without drifting into mid-cap territory.