Low-cost index funds and ETFs make high expense ratios a thing of the past.
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Updated · 1 min readWritten by Editor & Content Strategist+ more + more Edited by Managing EditorCo-written by Editor & Content StrategistLooking to invest in a diversified fund without a steep price tag? Enter low-cost index funds and ETFs. These funds offer a basket of securities for a very minimal fee.
Top-rated low-cost index funds
The lowest-cost index fund may not be the best-performing index fund. When evaluating index funds, consider other factors, such as market capitalization and sector focus. Our methodology: To arrive at our list, we filtered for index funds with the lowest expense ratios that have at least $10 billion in assets and a Morningstar rating of at least 4 stars.Our methodology:TickerFund nameExpense ratioFZILXFidelity ZERO International Index Fund0.000%FNILXFidelity ZERO Large Cap Index Fund0.000%SSEYXState Street Equity 500 Index II Portfolio0.010%FXAIXFidelity 500 Index Fund0.015%SWPPXSchwab® S&P 500 Index Fund0.020%FSMDXFidelity Mid Cap Index Fund0.025%FSPGXFidelity Large Cap Growth Index Fund0.035%Source: Morningstar. Data is current as of July 1, 2026, and is intended for informational purposes only, not for trading purposes.Source: Morningstar. Data is current as of July 1, 2026, and is intended for informational purposes only, not for trading purposes.
How free index funds work
Fidelity is one of very few brokers that offer access to no-expense-ratio index funds. The other is E*TRADE. The catch is that you need a brokerage account with these companies to access them. (Read more about Fidelity's and E*TRADE's free index funds.)
Some of the cheapest index funds out there are actually exchange-traded funds (ETFs). ETFs often track indexes just like index funds do, but they tend to have lower investment minimums (the amount of money you have to have in order to start investing in a fund).Our methodology: To arrive at our list, we filtered for U.S. equity ETFs with the lowest expense ratios that have at least $10 billion in assets and a Morningstar rating of at least 4 stars.Our methodology:TickerFund nameExpense ratioSPYMState Street® SPDR® Portfolio S&P 500® ETF0.020%VOVanguard Mid-Cap Index Fund ETF Shares0.030%VBVanguard Small-Cap Index Fund ETF Shares0.030%VUGVanguard Growth Index Fund ETF Shares0.030%SPTMState Street® SPDR® Portfolio S&P 1500 Composite Stock Market ETF0.030%VOOVanguard S&P 500 ETF0.030%SCHXSchwab U.S. Large-Cap ETF™0.030%Source: Morningstar. Data is current as of July 1, 2026, and is intended for informational purposes only, not for trading purposes.Source: Morningstar. Data is current as of July 1, 2026, and is intended for informational purposes only, not for trading purposes.» Ready to get started?See our roundup of the best online brokers for ETF investing» Ready to get started?Make sense of the markets with The Nerdy InvestorA weekly wrap on what's moving markets, plus two monthly deep-dives on how to improve your investing, straight to your inbox.Subscribe for free
How to choose a low-cost fund
When choosing a low-cost fund that works for your portfolio, you'll first want to decide between index funds and ETFs. (Read our full breakdown of the differences between index funds and ETFs.) If you're starting with a small budget and don't want to stress about an investment minimum, or if you want more control over the taxes generated by your investment, ETFs may be a good fit. But we're not knocking index funds. You may notice that many of the index funds on our list have lower expense ratios than the ETFs. A low (or nonexistent) expense ratio is a valid reason to choose a fund, so long as it otherwise meets your investment needs. Another nice thing about index funds? Once you've met the investment minimum, if there is one, many brokers allow subsequent investments in any dollar amount you choose. ETFs, on the other hand, are traded in shares, and sometimes a single share can cost hundreds of dollars. However, these days, many brokers offer fractional shares, which (as the name implies) let you buy part of an ETF for a specific dollar amount instead of having to buy a full share. The other — perhaps most important — thing you'll want to consider when choosing a low-cost fund is how it fits in with the rest of your portfolio. You don't want to weigh your investment choice too heavily on a fund's expense ratio. While it is an important aspect to consider, it's not the only one. Thinking about how a new investment fits with your existing holdings is key to ensuring you aren't overexposed to any one company or industry.About the authorsAlana BensonAlana Benson is an investing writer who covers socially responsible and ESG investing, financial advice and beginner investing topics. Her work has appeared in The New York Times, The Washington Post, MSN, Yahoo Finance, MarketWatch and others. See full bio.Bella AvilaBella Avila is an editor and content strategist on the investing and taxes team at NerdWallet. See full bio.Top-rated low-cost index fundsHow free index funds workTop-rated low-cost index ETFsHow to choose a low-cost fundMore like thisBest Retirement PlansBy June Sham, Elizabeth AyoolaBest Roth IRA Accounts for 2026By Alana BensonBest Robo-Advisors for Automated Investing: Top Picks for 2026By Alana Benson, Sabrina Parys
