Best Large-Cap Index Funds

Aug 19, 2023 By Susan Kelly

Are you looking to invest in large-cap companies and make sure that your money works as hard as possible for you? If so index funds can be a great option. Index funds are passive investments that track the performance of a specific market index such as the S&P 500, by holding components of the underlying stocks.

We will help guide you through the best large-cap index funds available and how they could benefit your portfolio.

What are Large-Cap Index Funds

Large-cap index funds track the performance of a specific, large-capitalisation stock market index. The most popular large-cap indexes include the S&P 500, Dow Jones Industrial Average and NASDAQ 100. These funds typically invest in all components of the underlying stocks held by the index they follow.

They also usually have lower management fees than active funds meaning they can be an attractive option for investors.

Large-Cap Index Funds

Fidelity ZERO Large Cap Index Fund

The Fidelity ZERO Large Cap Index Fund invests in the largest companies listed on U.S. exchanges, including those in the S&P 500 and Dow Jones Industrial Average. The fund is managed by Fidelity Investments one of the world’s largest asset managers with more than $7 trillion under management. The fund has a low expense ratio of 0.01%, making it one of the lowest-cost index funds on the market.

Vanguard S&P 500 ETF

Vanguard S&P 500 ETF is a low-cost, passively managed index fund that tracks the performance of the S&P 500 Index. The fund invests in stocks in the index and holds them proportionately to their weighting. This ensures that investors benefit from market gains without actively trading stocks or paying high management fees associated with active funds.

The fund has a low expense ratio of 0.03%, much lower than actively managed funds. Vanguard S&P 500 ETF also offers investors access to the most popular stocks on the U.S. stock market in one portfolio, making it an ideal way to diversify and grow your investments over time with minimal effort.

With its low fees and extensive selection of stocks, Vanguard S&P 500 ETF is an attractive option for investors looking to invest in the stock market.

SPDR S&P 500 ETF Trust

SPDR S&P 500 ETF Trust (SPY) is an exchange-traded fund that tracks the performance of the S&P 500 Index and invests in all its components. The fund has a low expense ratio of 0.09%, making it one of the lowest-cost index funds on the market. It also allows investors to diversify their portfolios by investing in the largest companies listed on U.S. exchanges and to gain exposure to various sectors, including technology, financials, health care, and industrials.

This diversification can help investors manage risk in their portfolios while taking advantage of market gains. SPY offers a convenient way for investors to access the stock market without actively trading stocks or paying high management fees associated with active funds. With its low costs and wide selection of stocks, SPY is an attractive option for investors looking to invest in the stock market.

iShares Core S&P 500 ETF

iShares Core S&P 500 ETF (IVV) is an exchange-traded fund that tracks the performance of the S&P 500 index and invests in all its components. It offers investors a low-cost and convenient way to access a broad range of large-cap stocks across various sectors without actively trading individual stocks or paying high management fees associated with active funds.

With a low expense ratio of 0.03%, IVV is one of the lowest cost index funds available and provides investors with exposure to the largest companies listed on U.S. exchanges and sectors like technology, financials, health care and industrials.

Schwab S&P 500 Index Fund

The Schwab S&P 500 Index Fund (SWPPX) is a low-cost, passively managed index fund that tracks the performance of the S&P 500. The fund invests in all components of the underlying stocks held by the index and has a low expense ratio of 0.03%. This makes it one of the lowest-cost funds for investors looking for a large-cap index fund.

The Schwab S&P 500 Index Fund also offers investors access to the largest companies listed on U.S. exchanges and provides diversification across sectors like technology, financials, health care, and industrials.

Shelton NASDAQ-100 Index Direct

The Shelton NASDAQ-100 Index Direct (SHNX) is an index fund that tracks the performance of the NASDAQ-100 Index. The fund invests in all components of the underlying stocks held by the index, ensuring investors benefit from any market gains without actively trading stocks or paying high management fees associated with active funds.

With a low expense ratio of 0.03%, SHNX is one of the lowest-cost index funds available, allowing investors to diversify their portfolios by investing in some of the world’s top tech companies without actively trading individual stocks or paying high management fees.

The fund offers access to diverse tech stocks and sectors such as technology, consumer services, healthcare, and industrial goods, allowing investors to diversify their holdings and benefit from market gains.

Invesco QQQ Trust ETF

Invesco QQQ Trust ETF (QQQ) is an exchange-traded fund that tracks the performance of the NASDAQ-100 Index. The fund invests in all components of the underlying stocks held by the index, meaning investors benefit from any market gains without actively trading stocks or paying high management fees associated with active funds.

With a low expense ratio of 0.20%, QQQ allows investors to diversify their portfolios by investing in some of the world’s top tech companies without actively trading individual stocks or paying high management fees. The fund offers access to diverse tech stocks and sectors such as technology, consumer services, healthcare, and industrial goods, providing investors with exposure to leading companies within the NASDAQ-100 index.

QQQ also offers investors the option of direct participation in the largest, most actively traded U.S. equity securities, making it an attractive investment choice for those looking for access to the NASDAQ-100.

SPDR Dow Jones Industrial Average ETF Trust

SPDR Dow Jones Industrial Average ETF Trust (DIA) is an exchange-traded fund that tracks the performance of the Dow Jones Industrial Average. The fund invests in all components of the underlying stocks held by the index, meaning investors benefit from any market gains without actively trading stocks or paying high management fees associated with active funds.

With a low expense ratio of 0.17%, DIA allows investors to diversify their portfolios by investing in some of the world’s most recognisable companies without actively trading individual stocks or paying high management fees.

FAQS

Are large-cap index funds good?

Large-cap index funds are a good choice for investors looking to diversify their portfolios while taking advantage of market gains. The funds are passively managed and charge low expense ratios, meaning you can benefit from any market gains without actively trading stocks or paying high management fees associated with active funds.

How do I choose the best index fund?

Your best index fund will depend on your needs and goals. Consider the size of the companies in the index, the expense ratio, and other factors such as performance history when making your decision. It would be best to weigh the pros and cons of different funds to ensure they fit into your overall investment strategy.

Which index fund has the highest return?

Returns for index funds will depend on the performance of the underlying stocks and can vary from year to year. It's important to research a fund's past performance and any fees associated with the fund before investing. Index funds with low expense ratios tend to have higher returns over time.

Conclusion

In conclusion, investing in large-cap index funds is an ideal scenario for most investors looking for a reliable and diverse portfolio. As the data suggests, these funds provide exposure to an array of companies within their respective industry, often providing higher flexibility regarding an overall return on capital invested. Furthermore, by restricting capital loss when the markets are volatile, investing via large-cap index funds acts as a form of protection against market downturn.

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