How much does it cost to invest in an index fund?

Some index funds have minimum investments as high as $3,000, while others, like Fidelity and Schwab, have none. You'll pay management fees through the expense ratio. The fees are deducted from the amount you invest.

How do index funds perform during market downturns?

An index fund will perform very similarly to its benchmark index during a market downturn. If you invested in an S&P 500 index fund and the market dropped by 20%, you'd expect the fund to drop by slightly more than 20% after accounting for fees. However, many index funds track a specific niche of the stock market, and some of these segments perform better during downturns. For example, consumer staples, utilities, and healthcare tend to outperform during downturns. If you invested in an index fund that tracks one of these sectors, you could see gains (or less severe losses) when the overall market is tanking.

Should I diversify across multiple index funds?

Before buying multiple index funds for diversification, review each fund's underlying holdings. If you already own shares of the Schwab S&P 500 Index Fund, you wouldn't achieve additional diversification by investing in the Fidelity ZERO Large Cap Index Fund because the holdings are almost identical. But if you owned shares of one of these funds and you invested in an emerging market index fund, you'd get more diversification from exposure to international stocks.

Can I reinvest dividends from index funds?

Yes, most brokerages give you the option to automatically reinvest index fund dividends.

What is Warren Buffett's favorite index fund?

Warren Buffett has repeatedly endorsed low-cost S&P 500 index funds for most retail investors. The Vanguard S&P 500 ETF (NYSEMKT:VOO), which has an expense ratio of just 0.03%, is a likely contender for Buffett's favorite index fund. The Oracle of Omaha famously bet $1 million that a low-cost S&P 500 index fund would outperform a portfolio of expensive hedge funds over 10 years. Ted Seides of Protégé Partners accepted the bet; Buffett won by a large margin by betting on the VOO.

What is the best-performing index fund?

The best-performing index fund varies significantly by holding period. For example, the VanEck Semiconductor ETF (NASDAQ:SMH) has been a top performer in recent years, with five-year average annualized returns of nearly 38% as of May 2026. However, broad market funds, such as index funds that track the S&P 500 or total U.S. stock market, have produced steadier returns over time, with average annual returns of about 10%.

8 Best Index Funds to Buy in June 2026

Here are the eight best index funds to add to your portfolio for steady, low-cost growth.

By Robin Hartill, CFP – Updated Jun 15, 2026 at 5:36 PM EST | Fact-checked by Parker Hicks

Key Points

Index funds provide diversified, low-risk investments and generally low fees.
The Fidelity ZERO Large Cap Index Fund mirrors the S&P 500 with no fees and no minimum investment.
The Schwab S&P 500 Index Fund offers near-identical returns to S&P 500 with a very low expense ratio.

The best index funds diversify your investments and have low fees. 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.

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An infographic explaining several factors to consider when choosing an index fund to invest in. — Image source: The Motley Fool.

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NASDAQMUTFUND: FNILX

Fidelity Concord Street Trust - Fidelity Zero Large Cap Index Fund

Today's Change

(1.13%) $0.30

Current Price

$26.85

Key Data Points

Day's Range

$26.85 - $26.85

52wk Range

$26.85 - $26.85

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2. Schwab S&P 500 Index Fund

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NASDAQMUTFUND: SWPPX

Schwab Capital Trust - Schwab S&P 500 Index Fund

Today's Change

(1.10%) $0.21

Current Price

$19.32

Key Data Points

Day's Range

$19.32 - $19.32

52wk Range

$19.32 - $19.32

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If you want to invest in an official S&P 500 index fund, the Schwab S&P 500 Index Fund (SWPP.X +1.10%) is about the cheapest you'll find. Its expense ratio is 0.02%, meaning you'll pay just $0.20 per $1,000 invested annually.

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.

The fund had gains of about 18% in 2025 and 11% through May 2026, almost identical to that of the S&P 50

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3. Vanguard Growth ETF

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NYSEMKT: VUG

Vanguard Growth ETF

Today's Change

(-1.47%) $-1.26

Current Price

$84.64

Key Data Points

Day's Range

$84.10 - $85.03

52wk Range

$69.63 - $90.60

Volume

39.6K

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If you want to assume more investment risk in the pursuit of higher rewards, the Vanguard Growth ETF (VUG -1.45%) 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 about 150 U.S. large-cap growth stocks. The fund is most heavily concentrated in tech stocks, which make up about two-thirds of its holdings.

The ETF has a minuscule 0.03% 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. The VUG's year-to-date gains were relatively flat through the end of April 2026, reflecting marketwide AI jitters. However, the fund's year-to-date returns for the first five months of the year have almost caught up to the S&P 500 after surged after AI stocks rallied in May 2026.

4. SPDR S&P Dividend ETF

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NYSEMKT: SDY

SPDR Series Trust - State Street SPDR S&P Dividend ETF

Today's Change

(0.55%) $0.82

Current Price

$150.14

Key Data Points

Day's Range

$148.80 - $150.28

52wk Range

$133.68 - $156.39

Volume

207.2K

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The SPDR S&P Dividend ETF (SDY +0.58%) 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.)

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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%. However, uncertainty has prompted a resurgence in safer, dividend-paying stocks -- which is why the SDY ETF initially outperformed the S&P 500 in 2026, then fell behind after May's AI stock boom.

The fund's 30-day SEC yield in June 2026 was 2.44% -- significantly higher than the S&P 500's 1%. The expense ratio is also somewhat higher at 0.35%.

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

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Dividend Yield

A financial metric indicating annual dividend income relative to stock price, expressed as a percentage.

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NYSEMKT: VNQ

Vanguard Real Estate ETF

Today's Change

(1.50%) $1.45

Current Price

$98.04

Key Data Points

Day's Range

$96.76 - $98.04

52wk Range

$86.84 - $99.15

Volume

60K

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If you want to invest across the real estate market, the Vanguard Real Estate ETF (VNQ +1.33%) 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 just under $70 billion.

Although its benchmark index includes a few real estate management and development companies, it is mostly composed of equity REITs that own and operate income-producing real estate.

Because it invests primarily in REITs, the ETF is also attractive to dividend investors. The fund's adjusted effective yield through May 2026 was about 2.7%. The Vanguard ETF may also appeal to investors concerned about inflation since real estate is traditionally seen as a hedge against rising prices elsewhere.

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6. Vanguard Russell 2000 ETF

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NASDAQ: VTWO

Vanguard Russell 2000 ETF

Today's Change

(-0.30%) $-0.36

Current Price

$120.10

Key Data Points

Day's Range

$118.18 - $120.29

52wk Range

$85.64 - $121.00

Volume

16.4K

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The Vanguard Russell 2000 ETF (VTWO -0.22%), which tracks the Russell 2000, is a good place to start for investors looking to capitalize on the potential upside of investing in small-cap companies. The fund invests in about 2,000 small- and mid-cap companies with assets under management hovering around $17.5 billion.

At 0.06%, 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. Through May 2026, the fund had year-to-date returns of around 12%, reflecting the outperformance of small-cap stocks in the first few months of the year.

7. ROBO Global Robotics and Automation Index ETF

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NYSEMKT: ROBO

Exchange Traded Concepts Trust - Robo Global Robotics And Automation Index ETF

Today's Change

(-3.80%) $-3.29

Current Price

$83.36

Key Data Points

Day's Range

$82.87 - $83.80

52wk Range

$57.29 - $90.51

Volume

193.5K

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Thematic investors wanting to capitalize on a long-term secular trend should check out the ROBO Global Robotics and Automation Index ETF (ROBO -3.80%). 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 $2 billion in total net assets and a 0.95% expense ratio, higher than any fund on this list.

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Artificial Intelligence

Artificial intelligence is the use of machines to mimic human intelligence.

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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 a three-year average annualized return of less than 15% through the end of 2025, compared to about 21% for the S&P 500 over the same period. The fund was up nearly 13% in the first four months of 2026, reflecting investors' bullishness on automation and AI.

8. Schwab Emerging Markets Equity ETF

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NYSEMKT: SCHE

Schwab Strategic Trust - Schwab Emerging Markets Equity ETF

Today's Change

(-2.66%) $-0.99

Current Price

$36.25

Key Data Points

Day's Range

$35.90 - $36.35

52wk Range

$29.62 - $37.40

Volume

2.4M

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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 (SCHE -2.66%) 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 2,200 holdings, with the largest concentrations in China, India, Taiwan, Brazil, and South Africa. Its expense ratio is only 0.06%.

The stocks of companies in emerging markets have historically underperformed compared to U.S. stocks. In the past five years as of May 2026, the Schwab emerging market fund had annualized returns of about 5%. Meanwhile, the S&P 500 racked up annualized returns of about 14% during the same five-year period.

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

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8 Best Index Funds to Buy in June 2026

Here are the eight best index funds to add to your portfolio for steady, low-cost growth.

Key Points

Key Data Points

2. Schwab S&P 500 Index Fund

Key Data Points

3. Vanguard Growth ETF

Key Data Points

4. SPDR S&P Dividend ETF

Key Data Points

Key Data Points

6. Vanguard Russell 2000 ETF

Key Data Points

7. ROBO Global Robotics and Automation Index ETF

Key Data Points

8. Schwab Emerging Markets Equity ETF

Key Data Points

Related investing topics

Best Dividend Index Funds to Buy in 2026

What to Invest In Right Now, June 2026

Selling Stock: Are There Tax Penalties on Capital Gains?

Should I Buy Stock Now or Wait?

About the Author

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Key Data Points

Top index funds to consider

1. Fidelity ZERO Large Cap Index Fund

2. Schwab S&P 500 Index Fund

3. Vanguard Growth ETF

5. Vanguard Real Estate ETF

6. Vanguard Russell 2000 ETF

8. Schwab Emerging Markets Equity ETF

How index funds work

How to choose an index fund

Benefits and risks of investing in index funds

Best Dividend Index Funds to Buy in 2026

What to Invest In Right Now, June 2026

Selling Stock: Are There Tax Penalties on Capital Gains?

Should I Buy Stock Now or Wait?

Key Data Points

Key Data Points

Key Data Points

Key Data Points

Key Data Points

Key Data Points

Key Data Points

How much does it cost to invest in an index fund?

How do index funds perform during market downturns?

Should I diversify across multiple index funds?

Can I reinvest dividends from index funds?

What is Warren Buffett's favorite index fund?

What is the best-performing index fund?

Index fund fees

The bottom line on index funds for long-term investors

Related investing topics

FAQ

4. SPDR S&P Dividend ETF

7. ROBO Global Robotics and Automation Index ETF