The Best Index Funds | Morningstar

Index funds are passive investments. They track an index with the aim of replicating that index’s performance minus expenses. Active funds, meanwhile, are led by managers who choose particular securities to outperform an index.

However, some index funds are better than others. The best index funds closely track their indexes, minimize costs, and follow sensible rules-based indexes.

Why Are Index Funds Such a Popular Investing Option?

The first index fund, Vanguard S&P 500 ETF VOO, debuted in 1976. Since then, funds that index the US stock market have exploded in popularity. And index funds that focus on international stocks and bonds are becoming more popular, too.

Why? Many argue that buying and holding the broad market (whatever that market may be) generates better results than trying to beat that same market through actively selecting securities. Indeed, Morningstar research has confirmed that, in many investment categories, index funds have outperformed active funds over time.

Best Index Funds to Buy

A good place to start your search for top index exchange-traded funds and mutual funds is with the Morningstar Medalist Rating. Funds that earn our highest rating—Gold—are those that we think are most likely to outperform over a full market cycle.

Here’s a list of the best low-cost index mutual funds and ETFs, which is broken down by the three main asset classes represented in many investors’ portfolios: US stocks, international stocks, and bonds.

Best Index Funds: US Stocks

These mutual funds and ETFs all land in one of the broad US stock Morningstar Categories, earn the top Morningstar Medalist Rating of Gold, and have an Analyst Assigned % equaling at least 80% as of Nov. 4, 2025.

1. DFA US Large Company DFUSX
2. Fidelity 500 Index FXAIX
3. Fidelity Mid Cap Index FSMDX
4. Fidelity Total Market Index FSKAX
5. iShares Core S&P 500 ETF/Index IVV BSPGX
6. iShares Core S&P Total US Stock Market ETF ITOT
7. Schwab US Mid-Cap Index SWMCX
8. Schwab Total Stock Market Index SWTSX
9. Schwab US Broad Market ETF SCHB
10. Schwab US Dividend Equity ETF SCHD
11. Schwab US Large-Cap ETF SCHX
12. Schwab S&P 500 Index SWPPX
13. State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF SPTM
14. State Street SPDR Portfolio S&P 400 Mid Cap ETF SPMD
15. State Street SPDR Portfolio S&P 500 ETF SPYM
16. State Street SPDR Portfolio S&P 600 Small Cap ETF SPSM
17. State Street SPDR Russell 1000 Yield Focus ETF ONEY
18. State Street Equity 500 Index SSSYX
19. T. Rowe Price Equity Index 500 TRHZX
20. Vanguard S&P 500 ETF/Vanguard 500 Index VOO VFIAX
21. Vanguard Dividend Appreciation ETF/Index VIG VDADX
22. Vanguard Growth ETF/Index VUG VIGAX
23. Vanguard High Dividend Yield ETF/Index VYM VHYAX
24. Vanguard Total Stock Market ETF/Index VTI VITNX
25. Vanguard Large-Cap ETF/Index VV VLCAX
26. Vanguard Mid-Cap ETF/Index VO VIMAX
27. Vanguard Mid-Cap Value ETF/Index VOE VMVAX
28. Vanguard Russell 1000 Growth ETF/Index VONG VRGWX
29. Vanguard Russell 1000 Index VRNIX
30. Vanguard Russell 1000 Value Index/ETF VONV VRVIX
31. Vanguard S&P 500 Growth ETF/Index VOOG VSPGX
32. Vanguard S&P 500 Value ETF/Index VOOV VSPVX
33. Vanguard S&P Mid-Cap 400 ETF/Index IVOO VSPMX
34. Vanguard S&P Mid-Cap 400 Growth VMFGX
35. Vanguard S&P Mid-Cap 400 Value Index VMFVX
36. Vanguard S&P Small-Cap 600 Index I VSMSX
37. Vanguard S&P Small-Cap 600 Value Index VSMVX
38. Vanguard Small-Cap Growth ETF/Index VBK VSGAX
39. Vanguard Small-Cap ETF/Index VB VSCIX
40. Vanguard Small-Cap Value ETF/Index VBR VSIAX
41. Vanguard Tax-Managed Small Cap I VTSIX
42. Vanguard Value ETF/Index VTV VVIAX

Although this is a list of the best broad-based low-cost index funds investing in US stocks, there is some variety here. Several funds in the group track the S&P 500 and therefore provide access to large-cap stocks representing about 80% of the US stock market. Other index funds on the list follow much broader market indexes that include more stocks, some of which are smaller-cap names. Meanwhile, other funds on the list are more narrowly focused, tracking indexes based on market capitalization (mid- or small-cap stocks) or investment style (growth stocks or value stocks).

To fully understand a fund’s strategy, be sure to read its Morningstar Fund Analyst Report.

Best International Stock Index Funds

These mutual funds and ETFs all land in one of Morningstar’s international stock categories, earn the top Morningstar Medalist Rating of Gold, and have an analyst-assigned % equaling at least 80% as of Nov. 4, 2025.

1. Fidelity Total International Index FTIHX
2. Franklin FTSE Japan ETF FLJP
3. Franklin FTSE Hedged Japan ETF FLJH
4. IShares Core MSCI Total International Stock ETF IXUS
5. IShares MSCI EAFE Value ETF EFV
6. State Street Glb All Cap Eq ex-US Idx SSGLX
7. Vanguard FTSE All-World ex-US ETF/Index VEU VFWAX
8. Vanguard FTSE All-World ex US Small-Cap ETF/Index VSS VFSNX
9. Vanguard FTSE Europe ETF/Index VGK VEUSX
10. Vanguard International Dividend Appreciation ETF/Index VIGI VIAAX
11. Vanguard Total International Stock ETF/Index VXUS VGTSX
12. Vanguard Total World Stock ETF VT VTWAX

Here, too, we have another list of the best broad-based low-cost index funds—in this case, focused on international stocks—where there is some variety. Some funds here track global indexes that include US stocks; others follow global indexes that exclude US stocks. A couple of funds invest in specific regions or countries only and are therefore better suited to the fringes of a portfolio. Consult the investment’s Analyst Report for more details.

Best Bond Index Funds

These mutual funds and ETFs all land in one of Morningstar’s bond categories, earn the top Morningstar Medalist Rating of Gold, and have an Analyst Assigned % equaling at least 80% as of Nov. 4, 2025.

1. Fidelity US Bond Index FXNAX
2. IShares Core Total USD Bond Market ETF IUSB
3. IShares Core US Aggregate Bond ETF AGG
4. Nuveen Bond Index TBIWX
5. Schwab Short-Term US Treasury ETF SCHO
6. Schwab US Aggregate Bond ETF SCHZ
7. Schwab US TIPS ETF SCHP
8. State Street SPDR Portfolio Aggregate Bond ETF/Index SPAB SSAFX
9. State Street SPDR Portfolio Short Term Treasury ETF SPTS
10. Vanguard Intermediate-Term Corporate Bond ETF/Index VCIT VICSX
11. Vanguard Short-Term Corporate Bond ETF/Index VCSH VSCSX
12. Vanguard Short-Term Inflation-Protected Securities ETF VTIP VTAPX
13. Vanguard Short-Term Treasury ETF/Index VGSH VSBSX
14. Vanguard Tax-Exempt Bond ETF VTEB
15. Vanguard Total Bond Market ETF/Index BND VBTIX

Several of the best broad-based index funds on this list land in one of the intermediate-term bond categories. As such, they’d make great choices to anchor the bond portion of an investor’s portfolio, assuming the goals for the money are six or more years away. Those saving for a shorter-term goal in the next three to five years might consider short-term bond funds instead. Investors with longer time horizons might consider a longer-term bond fund—but they should also be prepared for the enhanced volatility that comes with investing in long-term bonds. And retirees often hold a fund that’s meant to blunt the impact of inflation on their portfolios; there are options for that on this list, too.

The Benefits of Investing in Low-Cost Index Funds

Any historical performance advantage aside, there are several benefits to investing in index funds.

• Index funds are usually lower in cost than similar actively managed funds.
• Index funds perform like the market they’re tracking; as such, there aren’t many surprises in performance.
• Index funds don’t face “key-person risk,” which means that manager changes aren’t a big deal, since there’s no active security selection involved.
• Index funds are often more tax-friendly than similar active funds.

Should You Invest in an Index Mutual Fund or ETF?

Investors can access passive strategies through two different investment products: mutual funds and ETFs.

One product isn’t better than the other; choosing the right wrapper depends on personal preferences. Investors who value trading flexibility or may have a few dollars to invest might prefer an ETF, while those accessing index funds via a company-sponsored retirement plan are more than likely buying mutual funds.

Read Cage Match: Traditional Index Funds vs. ETFs to learn more about the differences between mutual funds and ETFs.

How to Find the Best Index Funds?

Focusing on funds that earn a Gold rating may be too limiting for some investors. Those who’d like to consider funds beyond our top rating can review a full list of US stock index funds and ETFs and bond index funds and ETFs that earn ratings of Bronze, Silver, and Gold.

Investors can also review complete lists of all index mutual funds or all index ETFs. These lists include funds that don’t currently earn Medalist Ratings.