8 Best Index Funds to Buy in March 2026

The best index funds can help you build wealth by diversifying your portfolio while keeping fees low. Unlike investing in individual stocks or bonds, index funds spread your risk across hundreds of securities, meaning your returns aren’t tied to the fate of any single company.

Top index funds

Top index funds to consider

Our picks for the eight best index funds for this year can help you accomplish a variety of investment goals. Plus, they have low expense ratios and low minimum investments.

Many of the funds listed below soared in 2025 in spite of substantial volatility earlier in the year. The rocky performance earlier in the year was largely due to fears of a trade war due to President Trump’s tariffs. But remember: Index investing is about building wealth for the long haul, so try not to focus on short-term ups and downs.

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1. Fidelity ZERO Large Cap Index Fund

Investing in S&P 500 index funds is, perhaps, the closest thing to a guaranteed way to build wealth over time. The Fidelity ZERO Large Cap Index Fund (NASDAQMUTFUND:FNIL.X) tracks an index of more than 500 U.S. large-cap stocks and performs very similarly to an S&P 500 index fund.

However, because this fund is not an official S&P 500 index fund, it avoids paying expensive licensing fees to S&P Global (NYSE:SPGI), the index’s parent company. The fund tracks the Fidelity U.S. Large Cap Index as its benchmark.

The “ZERO” in the fund’s name denotes that its expense ratio is 0%. There’s also no minimum investment, making the fund a good choice for beginning investors.

The fund’s performance closely mirrors that of the S&P 500. The fund rose about 17% in 2025, slightly lagging the S&P 500 index’s results for the year.

2. Schwab S&P 500 Index Fund

If you want to invest in an official S&P 500 index fund, the Schwab S&P 500 Index Fund (NASDAQMUTFUND:SWPP.X) is about the cheapest you’ll find. Its expense ratio is 0.02%, meaning you’ll pay just $0.20 annually for every $1,000 you invest.

Because the investment fee is so low, your returns are virtually identical to the performance of the S&P 500. There’s no minimum investment amount, so you can start investing with as little as $1.

Like its benchmark index, the fund had gains of about 17.9% in 2025, almost identical to that of the S&P 500.

3. Vanguard Growth ETF

If you want to assume more investment risk in the pursuit of higher rewards, the Vanguard Growth ETF (NYSEMKT:VUG) is a solid choice. The fund tracks the CRSP US Large Cap Growth Index, which performs similarly to the S&P 500 Growth Index. The ETF invests in 150 U.S. large-cap growth stocks. The fund is most heavily concentrated in the following sectors:

Consumer staples and utility stocks each make up less than 1% of the fund’s value. The ETF has a minuscule 0.04% expense ratio.

Through the end of 2025, the fund’s average annual return over five years (before taxes) was almost 15%, similar to the S&P 500’s returns for the same period.

4. SPDR S&P Dividend ETF

The SPDR S&P Dividend ETF (NYSEMKT:SDY) is a top-performing index fund for income-oriented investors. The dividend-weighted fund’s benchmark is the S&P High Yield Dividend Aristocrats® Index, which tracks about 150 stocks with the highest dividend yields in the S&P Composite 1500 Index. (Dividend Aristocrats® is a registered trademark of Standard & Poor’s Financial Services LLC.)

All the companies owned by the ETF have increased their dividend payments annually for at least 25 consecutive years.

Dividend-paying stocks tend to be less volatile compared to the overall stock market. So it’s unsurprising that the SPDR S&P 500 Dividend ETF underperformed the S&P 500 in 2025, with total returns just above 8%. The fund has also underperformed the broad-market index on both a five-year and 10-year basis.

The fund’s 30-day SEC yield in January 2026 was 2.46% — significantly higher than the S&P 500’s 1.14%. The expense ratio is also somewhat higher at 0.35%. The fund’s top five holdings are:

1. Verizon Communications Inc. (NYSE:VZ)
2. Realty Income (NYSE:O)
3. Target Corp. (NYSE:TGT)
4. Chevron Corp. (NYSE:CVX)
5. PepsiCo (NASDAQ:PEP)

Several real estate investment trusts (REITs) are represented in the fund. REITs typically pay high dividends because they’re required to disburse at least 90% of their taxable income. The ETF is underweighted in tech stocks, which don’t tend to pay generous dividends.

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5. Vanguard Real Estate ETF

If you want to invest across the real estate market, the Vanguard Real Estate ETF (NYSEMKT:VNQ) is a solid, low-cost option. With an expense ratio of 0.13%, it’s also the largest real estate index fund by far, with total net assets of more than $65 billion.

Its benchmark index is the MSCI US Investable Market Real Estate 25/50 Index, which broadly tracks equity REITs in the U.S. Although the index includes a few real estate management and development companies, it consists mostly of equity REITs, which own and operate income-producing real estate.

Because it invests primarily in REITs, the ETF is also attractive to dividend investors. The fund’s 12-month dividend yield in December 2025 was 3.92%. The Vanguard ETF may also appeal to investors concerned about inflation since real estate is traditionally seen as a hedge against rising prices elsewhere.

6. Vanguard Russell 2000 ETF

The Vanguard Russell 2000 ETF (NASDAQ:VTWO), which tracks the Russell 2000, is a good place to start for investors who want to take advantage of the potential upside of investing in small-cap companies. The fund invests in about 2,000 small- and mid-cap companies with a median market capitalization of $3.5 billion.

As of January 2026, the index fund’s largest concentrations were inhealthcare (19%), industrials (18%), and financials (17%). At 0.1%, its expense ratio is relatively low, especially for a fund offering exposure to the companies with the most growth potential. Like its benchmark index, the Vanguard Russell 2000 ETF had total returns of about 13% in 2025.

7. ROBO Global Robotics and Automation Index ETF

Thematic investors wanting to capitalize on a long-term secular trend should check out the ROBO Global Robotics and Automation Index ETF (NYSEMKT:ROBO). The index fund’s benchmark is the Robo Global Robotics and Automation Index, which tracks 77 robotics, automation, and artificial intelligence (AI) companies. It has roughly $1.5 billion in total net assets and a 0.95% expense ratio, higher than any fund on this list.

The ETF offers investors a way to capture the growth of several booming trends. Robotics offers huge cost savings to companies; the industry is forecast to have a compound annual growth rate of 14% through 2030. Interest in artificial intelligence (AI) stocks has surged since late 2022, when ChatGPT launched. However, the ETF has still underperformed the stock market since then, posting three-year average annualized returns of less than 15% through the end of 2025, compared to about 21% for the S&P 500 over the same period.

8. Schwab Emerging Markets Equity ETF

If you want to diversify your portfolio through exposure to high-growth emerging markets but don’t want your risk concentrated in a single economy or region, the Schwab Emerging Markets Equity ETF (NYSEMKT:SCHE) may be a good fit. It tracks the FTSE Emerging Index, a collection of large- and mid-cap stocks in more than 20 developing countries.

The fund has more than 2,100 holdings, with the largest concentrations in China, India, Taiwan, Brazil, and South Africa. Its expense ratio is only 0.11%.

The stocks of companies in emerging markets have historically underperformed compared to U.S. stocks. In the past five years as of December 2025, the Schwab emerging market fund had annualized returns of about 4.5%. Meanwhile, the S&P 500 racked up annualized returns of about 15% during the same five-year period.

The Schwab emerging market fund rose over 26% in 2025, as international stocks outperformed U.S. stocks for the year.

Considering about 85% of the world’s population lives in developing countries, investors who have a long-term focus and are comfortable with volatility may want to consider investing in this fund.

How to choose

How to choose an index fund

Index funds hold baskets of investments that track a market index, such as the S&P 500 (SNPINDEX:^GSPC). They are passively managed, meaning the fund’s holdings are entirely determined by the index the fund tracks.

The goal of an index fund is to match the performance of the underlying index. They’re a good choice for long-term investors because you can lock in the returns of the overall stock market or a specific segment of it.

The returns generated by an index fund generally never exceed the performance of the index itself, if only because of index fund expense ratios, which are the annual management fees collected by index fund managers. Since index funds are passively managed, they are actually more likely to outperform funds with active managers over the long term.

An index fund can be either a mutual fund or an exchange-traded fund (ETF), both of which are managed by investment advisers who have to register with the U.S. Securities and Exchange Commission (SEC). Investors buy shares of mutual funds directly from asset management companies, while shares in ETFs are purchased and sold through stock exchanges.

Consider these key factors when picking an index fund to invest in:

• Target market segment: Some index funds confer portfolio exposure to the entire U.S. stock market by tracking indexes such as the S&P 500. Others track narrower indexes focused on specific stock market sectors, industries, countries, or company sizes.
• Your investment goals: Some stock market indexes and, by extension, some index funds track companies with specific characteristics, such as high growth potential, a history of reliable dividend payments, or adherence to environmental, social, and governance (ESG) standards.
• Expense ratio: An index fund’s expense ratio — the percentage of your investment paid annually as a management fee to the fund’s manager — can vary significantly. A good expense ratio for a total stock market index fund is about 0.1% or less; a small number of index funds have 0% expense ratios. More specialized index funds tend to have higher expense ratios.
• Minimum required investment: Some mutual funds have minimum investments of $1,000 or more. ETF index funds are accessible for the cost of a single share. Many brokers also offer ETFs as fractional shares, allowing you to invest for as little as $1.
• Benchmark tracking performance: The degree to which an index fund tracks its underlying index can vary. The performances of the best index funds are very closely correlated with their benchmark indexes.

Benefits and risks

Benefits and risks of investing in index funds

Index funds are often the backbone of a retirement portfolio for good reason: They’re an effortless, beginner-friendly way to invest. However, there are a few pros and cons to be aware of first.

Benefits of investing in index funds:

• Low fees: Perhaps the biggest benefit of investing in a passively managed index fund is the low cost because you’re not paying fund managers to handpick investments. Many funds have expense ratios of 0.1% or less.
• Diversification: Because an index fund invests in many different companies, you get far more diversification than you can typically get by building a portfolio on your own, particularly if the fund tracks a major index like the S&P 500.
• Good tool for long-term investing: Shares of individual companies can rise and fall dramatically based on rumors, speculation, or a single earnings call. Though the overall stock market isn’t immune to investor sentiment, the highs and lows are less pronounced compared to individual stocks.

Risks of investing in index funds:

• You can’t beat the market: Some investors hesitate to invest in index funds because they don’t beat the market — index funds aim to replicate an index’s performance, so at best, your results will be on par with the underlying index’s results, minus fees.
• Not all indexes are the same: Funds that track the entire stock market or a large segment of it, like the S&P 500, have been solid winners over time, but some indexes are incredibly niche and far more vulnerable to market hype.

Index fund fees

Index fund fees

Index fund fees are expressed as the expense ratio. If you invest $10,000 in an index fund with a 0.1% expense ratio, $10 of your investment goes toward fees, and the remaining $9,990 is invested. Expense ratio fees cover costs of management, administration, and marketing.

Because they’re passively managed and have low overhead, most index funds have extremely low fees. The average index fund expense ratio is 0.06%, according to Morningstar research. By comparison, the average actively managed fund fee is 10 times higher at 0.6%.

The bottom line on index funds for long-term investors

There are two ways to make money from index funds: sell the investment for a gain or earn dividends. A growth-focused index fund, like the Vanguard Growth ETF, has the potential for big gains.

However, higher rewards come with greater risk, and dividend payments will likely be minimal. If you want investment income, a dividend fund like the SPDR S&P Dividend ETF is a good choice. There’s less potential for big gains, but you can earn reliable dividend income.

Although there’s no single best index fund to invest in, a couple of good options are an S&P 500 index fund, which tracks about 80% of the U.S. stock market, or a total stock market fund, which tracks the entire U.S. stock market. These tend to be good choices because they’re well diversified and allow you to lock in the historical growth of the domestic stock market.

All investments carry some risk, but S&P 500 index funds have been historically safe investments for the long term since the S&P 500 has always delivered positive returns over long periods. The S&P 500’s average annual returns are about 10%.

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