12 Index and ETF Funds for Building Wealth in Today's Market

Index mutual funds and exchange-traded funds (ETFs) are a great way to invest in large or small -- typically specialized -- sectors of the stock market without having to choose the stocks yourself.

Both index mutual funds and ETFs manage weighted portfolios of stocks that make up that particular index. The main differences are that ETFs can be bought and sold by the share whenever the market is open. Meanwhile, mutual funds only trade at the end of each market day; many carry minimum investments of $1,000 or more.

There are thousands of each. Here are a dozen that could serve you very well during these uncertain times marked by rising interest rates, inflation the likes of which we haven't seen in decades, and a possible recession around the corner.

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The Vanguard S&P 500 ETF (NYSEMKT: VOO) is a weighted collection of the 500 stocks that make up one of the largest of benchmarks: the S&P 500 index, which includes about three-fourths of the stock market's overall value.

Vanguard's ETF version has a market cap of about $270 billion and a dividend yield of about 1.5% and is now down about 13% for the year, just like the index itself, of course. That's what index funds do.

ALSO READ: How to Invest in Index Funds

The Rydex Dow Jones Industrial Average Fund (NASDAQMUTFUND: RYDAX) from Fidelity seeks to track the performance of the widely followed Dow Jones Industrial Average.

While the index comprises 30 blue chip, large-cap stocks, this Fidelity Investments offering currently has 42 in its basket, with UnitedHealth Group as its largest component, at about 9%.

This Fidelity fund carries a minimum investment of $2,500 and has provided an average annual return of about 8.9% over the past five years.

The SPDR S&P Dividend ETF (NYSEMKT: SDY) aims to provide investment results that correspond to the S&P High Yield Dividend Aristocrats index. Those are stocks that have raised their dividends for at least 25 straight years and are part of the S&P 500. This ETF is currently yielding about 2.4%.

ALSO READ: Down Between 15% and 53%: 3 Top Dividend Aristocrats That Are Too Cheap to Ignore

The iShares Russell 3000 ETF (NYSEMKT: IWV) tracks the Russell 3000 Index, which itself seeks to represent the entire stock market by including 3,000 stocks in a single fund. The iShares version is from BlackRock and is down about 13.5% this year with a yield of about 1.1%.

The CRM Mid Cap Value Fund Institutional (NASDAQMUTFUND: CRIMX) targets companies in the Russell Midcap Value Index and usually holds 35 to 50 stocks with market caps of $328 million to about $44 billion.

This is an institutional fund, with a minimum investment of $1 million that makes it accessible to everyday investors through investment advisors and big brokerages.

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The Vanguard Small-Cap ETF (NYSEMKT: VB) is a low-expense way to track the CRSP U.S. Small-Cap Index of the bottom 15% of publicly traded companies based on market cap. Vanguard is known for its small expense ratios, limiting how much you pay the company for managing the portfolio.

This particular ETF reflects the volatility of small growth stocks, with a 10-year gain of about 160% but a year-to-date loss of about 13%.

ALSO READ: How to Invest in Small-Cap Stocks

The Energy Select Sector SPDR ETF (NYSEMKT: XLE) is a great example of a way to ride a hot market. Exxon and Chevron together represent about 45% of its holdings. With oil prices high, this stock has risen by nearly 50% over the past year. And the nice thing about this kind of liquidity is that you can get out easily if prices fall.

Several ETFs track the market for real estate investment trusts (REITs), and Vanguard Real Estate ETF (NYSEMKT: VNQ) is by far the largest, with a market cap of about $42 billion.

This fund holds about 160 REITs at any time and currently is yielding about 3%. And a share price that's down about 16% could be a buy signal to those who are confident about an eventual rally in the real estate market.

ALSO READ: Real Estate Investment Trusts: What They Are and How to Invest in Them

The iShares MSCI World ETF (NYSEMKT: UTH) currently holds about 1,500 stocks that it uses to track the MSCI World Index as its benchmark. This is a good example of a broad-based fund that provides exposure to markets and companies around the world. That can help dampen volatility in some cases while adding diversity in all cases to your portfolio, and it currently is providing a dividend yield of about 1.8%.

The Fidelity MSCI Financials ETF (NYSEMKT: FNCL) tracks an index of financial services companies -- MSCI USA IMI Financials 25/50 Linked Index -- and includes the kind of stocks that often have a knack of rallying nicely when the economy heads north.

This ETF has provided a total return of about 130% over the past 10 years along with a yield that has typically ranged from 1.5% to 2.5%.

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The Parnassus Core Equity Investor Fund (NASDAQMUTFUND: PRBLX) shows you can do good while doing good. The fund focuses on large-cap companies that show positive performance on environmental, social, and governance (ESG) criteria. And it's performed well itself by matching the S&P 500 in 10-year total return of about 260% each.

ALSO READ: What Is ESG Investing & What Are ESG Stocks?

The Global X U.S. Infrastructure Development ETF (NYSEMKT: PAVE) is your on-ramp to investing in more than 100 companies involved in providing raw materials, heavy equipment, and the engineering brainpower to build new highways, bridges, and more.

This $4 billion fund benchmarks itself against the INDXX U.S. Infrastructure Development Index, and its 10-year total return is not far behind that of the S&P 500. A jump in infrastructure spending might push it past the big benchmark.

Index funds -- either the mutual fund variety or ETFs – have proven their worth for decades and many times outperform professional stock pickers, even with their expense ratios included. That makes them ideal for long-term investors who want to enjoy both share price growth and passive income from those that produce streams of dividends.

After the worst six months we’ve seen in the stock market in a half century, now is a great time to consider buying some of these. After all, history shows that the stock market is one of the best ways to make money over the long run. For instance, the S&P 500 was created in 1955 and returned on average about 10% a year ever since.

Marc Rapport has positions in Vanguard Real Estate ETF and CRM Mid Cap Value Fund Class Institutional. The Motley Fool has positions in and recommends Energy Select Sector SPDR, Vanguard Real Estate ETF, Vanguard S&P 500 ETF, and Vanguard Small-Cap ETF. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.