Best-Performing Index Funds to Consider (Returns, Expenses, etc Shown)

William Lipovsky headshot William Lipovsky
Verified & Updated Dec 13, 2018

While history does not predict future success, past performance is reputation-building. Index funds with a strong reputation have that reputation for a good reason and may have a higher chance of performing well in the future. Below, we have the list of the best-performing index funds to consider based on their track records.

The Best-Performing Index Funds to Consider

There has been much debate over whether actively-managed funds or index funds are better options for investors, but it is true that index funds are cheaper than managed funds, which can improve the investor’s take-home returns. (For more information on passive investing, see our articles on the benefits of Roth IRAs and “lazy” portfolios.)

The following index funds should be considered based on their performance records. All annualized return rates and expense ratios were compiled using the most up-to-date numbers as of December 2018, with data from Market Watch and the official fund web pages.

Fidelity 500 Index Fund (FXAIX)

  • Fund inception year: 1988
  • Fund description: The FUSVX fund invests in large and medium cap domestic stocks (blended) and follows the S&P 500 index.
  • 5-year annualized return: 10.58%
  • 10-year annualized return: 14.31%
  • Expense ratio: 0.02%
  • Portfolio: Technology sector, financial sector
  • ETF available: Yes, SPDR S&P 500 (SPY)
  • Find more information on the FXAIX fund from Fidelity

Fidelity Nasdaq Composite Index Fund (FNCMX)

  • Fund inception year: 2003
  • Fund description: The FNCMX fund invests in large-cap domestic growth stocks and follows the NASDAQ Composite index.
  • 5-year annualized return: 12.99%
  • 10-year annualized return: 17.75%
  • Expense ratio: 0.28%
  • Portfolio: Technology sector, consumer cyclical
  • ETF available: Yes, Nasdaq Composite Index Tracking Stock (ONEQ)
  • Find more information on the FNCMX fund from Fidelity

Vanguard 500 Index Fund (VFINX)

  • Fund inception year: 1976
  • Fund description: The VFINX fund invests in large-cap domestic stocks (blended) and follows the S&P 500 index.
  • 5-year annualized return: 10.24%
  • 10-year annualized return: 13.93%
  • Expense ratio: 0.14%
  • Portfolio: Technology sector, financial sector
  • ETF available: Yes, Vanguard S&P 500 ETF (VOO)
  • Find more information on the VFINX from Vanguard

Vanguard Small-Cap Value Index (VISVX)

  • Fund inception year: 1998
  • Fund description: The VISVX fund invests in small-cap domestic value stocks and follows the Spliced Total Stock Market Index.
  • 5-year annualized return: 7.47%
  • 10-year annualized return: 14.39%
  • Expense ratio: 0.19%
  • Portfolio: Financial sector, industrial sector
  • ETF available: Yes, Vanguard Small-Cap Value ETF (VBR)
  • Find more information on the VISVX fund from Vanguard

Vanguard Total Stock Market Index Fund (VTSMX)

  • Fund inception year: 1992
  • Fund description: The VTSMX fund invests in large, medium, and small cap domestic stocks (blended) and follows the Spliced Total Stock Market Index.
  • 5-year annualized return: 9.77%(as of 2018)
  • 10-year annualized return: 14.21% (as of 2018)
  • Expense ratio: 0.14%
  • Portfolio: Technology sector, financial sector
  • ETF available: Yes, Vanguard Total Stock Market ETF (VTI)
  • Find more information on the VTSMX fund from Vanguard

More Options from Vanguard

If you’re already heavily invested in the recommended Vanguard funds above, or they don’t compliment what you already have, there are other respectable Vanguard index funds to choose from:

  • 500 Index Fund Admiral Shares (VFIAX)
  • European Stock Index Fund Admiral Shares (VEUSX)
  • Growth Index Fund Admiral Shares (VIGAX)
  • Small-Cap Index Fund Admiral Shares (VSMAX)
  • Large-Cap Index Fund Admiral Shares (VLCAX)
  • Total Stock Market Index Fund Admiral Shares (VTSAX)
  • Mid-Cap Index Fund Admiral Shares (VIMAX)
  • FTSE Social Index Fund Investor Shares (VFTSX)
  • Developed Markets Index Fund Admiral Shares (VTMGX)
  • Extended Market Index Fund Admiral Shares (VEXAX)
  • High Dividend Yield Index Fund Investor Shares (VHDYX)
  • Total World Stock Index Fund Investor Shares (VTWSX)
  • Tax-Managed Small-Cap Fund Admiral Shares (VTMSX)
  • Long-Term Corporate Bond Index Fund Admiral Shares (VLTCX)

Morningstar Recommended Index Funds (Regardless of Recent Performance)

Independent investment research firm Morningstar offers recommendations for stocks, ETFs, and funds. Morningstar recommends the following index funds based on their histories and prospects:

  • Federated Mid Cap Index Fund Institutional Shares (FMCRX)
  • Hennessy Gas Utility Fund Investor Class (GASFX)
  • USAA NASDAQ-100 Index Fund (USNQX)
  • Praxis Growth Index Fund Class I (MMDEX)
  • Dreyfus Small Cap Stock Index Fund (DISSX)
  • Columbia Small Cap Index Fund Class A (NMSAX)
  • Northern Stock Index Fund (NOSIX)
  • Fidelity Four-in-One Index Fund (FFNOX)
  • Schwab® S&P 500 Index Fund (SWPPX)
  • Wells Fargo Index Fund – Class Admin (WFIOX)
  • Rowe Price Total Equity Market Index Fund (POMIX)
  • JPMorgan Equity Index Fund Select Class (HLEIX)

In Summary

Index funds (and index ETFs) offer low fees and consistent returns, making them an appealing alternative to managed funds. Vanguard and Fidelity offer some of the most well-established, best-performing index funds, but research firm Morningstar also recommends options from Wells Fargo, JPMorgan, and Rowe.

To learn more about investing, see our article on mutual funds with average returns of 12%.

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