6 Top-Performing Large-Blend Funds | Morningstar

Large-cap blend funds can serve as the bedrock of a stock portfolio. Yet with well over 600 funds and exchange-traded funds to choose from, it can be difficult to find winners. To screen for the top-performing funds in this category, we looked for those with the best returns over the last one-, three-, and five-year periods.

Six large-blend funds made it through the screen. Offerings from Vanguard stood out, taking up two of the six spots.

• Fidelity 500 Index Fund FXAIX
• iShares S&P 500 Index Fund BSPGX
• Schwab S&P 500 Index Fund SWPPX
• State Street SPDR Portfolio S&P 500 ETF SPYM
• Vanguard 500 Index Fund VFFSX
• Vanguard PrimeCap Fund VPMAX

Over the last 12 months, the large-blend category returned 17.15%. On an annualized rate, large-blend funds have returned 20.34% over the last three years and 12.67% over the last five. That compares with the Morningstar US Market Index, which has returned 18.88% over the last 12 months, 22.79% per year over the last three years, and 13.24% per year over the last five years.

Screening for the Top-Performing Large-Blend Funds

Large-blend portfolios are fairly representative of the overall US stock market in terms of size, growth rates, and price. Stocks in the top 70% of the capitalization of the US equity market are defined as large-cap. The blend style is assigned to portfolios where neither growth nor value characteristics predominate. These portfolios tend to invest across the spectrum of US industries, and owing to their broad exposure, the portfolios’ returns are often similar to those of the S&P 500 Index.

To find the best large-blend funds, we looked at returns from the past one, three, and five years using data in Morningstar Direct. We screened for open-ended and exchange-traded funds in the top 25% of the category using their lowest-cost primary share classes for those periods. We also filtered for funds with a Morningstar Medalist Rating of Gold. We excluded funds with assets under $100 million and analyst coverage that was not 100%. This left six investments.

Because the screen was created with the lowest-cost share class for each fund, some may be listed with share classes that are not accessible to individual investors outside of retirement plans, or they may be aimed at institutional investors and require large minimum investments. The individual investor versions of those funds may carry higher fees, reducing returns to shareholders. In addition, Medalist Ratings may differ among the share classes of a fund.

Fidelity 500 Index Fund

• Morningstar Medalist Rating: Gold
• Morningstar Rating: ★★★★★

The $740 billion fund has gained 19.21% over the past 12 months, while the average fund in its category is up 17.15%. The Fidelity fund, launched in May 2011, has climbed 23.15% over the past three years and 14.39% over the past five.

Fidelity 500 Index offers a well-diversified, market-cap-weighted portfolio of 500 of the largest US stocks. The funds accurately represent the large-cap opportunity set while charging rock-bottom fees, a recipe for success over the long run.

The fund tracks the flagship S&P 500, which selects 500 of the largest US stocks—roughly 80% of the US equity market—and weights them by market cap. An index committee has discretion over selecting companies that meet certain liquidity and profitability standards. While a committee-based approach may lack clarity, it adds flexibility to reduce unnecessary changes during reconstitution, taming transaction costs compared with more rigid rules-based indexes.

The end portfolio is well-diversified and accurately represents the US large-cap opportunity set. This allows the strategy to capitalize on its low fee and closely track the performance of the large-cap market.

iShares S&P 500 Index Fund

• Morningstar Medalist Rating: Gold
• Morningstar Rating: ★★★★

Over the past 12 months, the BlackRock fund rose 19.20%, while the average fund in its category rose 17.15%. The fund, launched in July 2019, has climbed 23.12% over the past three years and 14.38% over the past five.

The bedrock of this strategy is market cap weighting, which harnesses the market’s collective wisdom on the relative value of each holding with the added benefit of low turnover and associated trading costs. It’s a sensible approach because the market tends to do a good job pricing large-cap stocks. Large, highly traded markets tend to reflect new information quickly and are well-suited for indexing.

When a few richly valued companies or sectors power most of the market gains, market-cap weighting may expose the strategy to stock- or sector-level concentration risk. As of year-end 2024, the top 10 holdings made up the largest portion of the index (37%) in several decades, and the 34% allocation to technology stocks was the highest since the dot-com bubble. But this is not a fault in its design. The S&P 500 simply reflects the market composition. In the long run, its broad diversification, low turnover, and low fee outweigh these risks.

Schwab S&P 500 Index Fund

• Morningstar Medalist Rating: Gold
• Morningstar Rating: ★★★★

The $133.6 billion fund has gained 19.20% over the past 12 months, while the average fund in its category is up 17.15%. The Schwab fund, launched in May 1997, has climbed 23.12% over the past three years and 14.37% over the past five.

Unlike many of its rivals, the S&P 500’s constituents are determined by a committee, which gives the index more flexibility than others that follow mechanical rules. The committee attempts to keep the index representative of the US large-cap market and makes changes to the index as needed.

The S&P 500 selects close to 500 stocks from the pool of the largest US companies that pass its liquidity and profitability screens. The profitability screen requires that the sum of a company’s GAAP earnings over the past four quarters be positive, as well as the most recent quarter. The screen imparts a slight quality tilt to the portfolio but has a limited impact on the portfolio’s composition relative to other large-cap-focused benchmarks since many large-cap stocks tend to be profitable.

State Street SPDR Portfolio S&P 500 ETF

• Morningstar Medalist Rating: Gold
• Morningstar Rating: ★★★★★

The $102.7 billion fund has gained 19.21% over the past 12 months, while the average fund in its category is up 17.15%. The State Street fund, launched in November 2005, has climbed 23.12% over the past three years and 14.38% over the past five.

This fund offers a well-diversified, market-cap-weighted portfolio of 500 of the largest US stocks. It accurately represents the large-cap opportunity set while charging rock-bottom fees, a recipe for success over the long run.

The fund tracks the flagship S&P 500, which selects 500 of the largest US stocks—roughly 80% of the US equity market—and weights them by market cap. An index committee has discretion over selecting companies that meet certain liquidity and profitability standards. While a committee-based approach may lack clarity, it adds flexibility to reduce unnecessary changes during reconstitution, taming transaction costs compared with more rigid rules-based indexes.

Vanguard 500 Index Fund

• Morningstar Medalist Rating: Gold
• Morningstar Rating: ★★★★

The $1.5 trillion fund has climbed 19.22% over the past 12 months, outperforming the average fund in its category, which rose 17.15%. The Vanguard fund, which launched in June 2016, has climbed 23.15% over the past three years and gained 14.39% over the past five years.

When a few richly valued companies or sectors power most of the market gains, market cap weighting may expose the strategy to stock- or sector-level concentration risk. As of year-end 2024, the top 10 holdings made up the largest portion of the index (37%) in several decades, and the 34% allocation to technology stocks was the highest since the dot-com bubble. But this is not a fault in design. The S&P 500 simply reflects the market composition. In the long run, its broad diversification, low turnover, and low fee outweigh these risks.

Vanguard PrimeCap Fund

• Morningstar Medalist Rating: Gold
• Morningstar Rating: ★★★★★

The $75.7 billion fund has climbed 33.84% over the past 12 months, outperforming the average fund in its category, which rose 17.15%. The Vanguard fund, launched in November 2001, has climbed 24.25% over the past three years and 14.79% over the past five.

Vanguard Primecap continues to benefit from its outstanding subadvisor and rock-bottom fees. This fund, which has spent time in both the large-blend and large-growth Morningstar Categories over the past 20 years, is one of six mutual funds overseen by subadvisor Primecap Management that stands out in many positive ways. Primecap is led by investors, not marketers, and keeps its focus on research and portfolio management. Its investment team is well-stocked with industry veterans and newcomers hired for their intellect, curiosity, and range of professional perspectives. The firm is mindful of company valuation, prizes unconventional thinking, and pursues stocks off the beaten path.

The firm is also unique for its extreme patience. It often holds stocks for a decade or more, a rare trait that can pay off when it backs firms with competitive moats, rising earnings, or skilled leadership. Top holding Eli Lilly is a case in point. A long-term orientation also works when a company suffers a steep share-price drop, but its troubles are fixable and fleeting.