Top 7 index funds to invest in
An index fund is an investment fund, exchange-traded fund (ETF) or mutual fund. A fund manager, a brokerage, or an investment bank may create the index. The fund managers replicate the fund by building a fund similar to the index without managing the fund actively. With time, the index changes with the addition and removal of companies, and the fund manager incorporates the modifications into the fund. Here is a list of top index funds.
Fidelity 500 Index Fund (FXAIX)
It is one of the top index funds that invest in publicly traded companies, similar to the S&P 500 Index Fund.
Washington Mutual Investors Fund (WSHFX)
Launched in 1952, the Washington Mutual Investors Fund has outperformed the S&P 500 in almost every market drop of fifteen percent or higher. The industry aspires to yield capital growth and income from top-notch companies with consistent dividends. Even though it is not an environmental, social, and governance fund, Washington Mutual Investors Fund avoids, stocks that deal with products like tobacco and alcohol companies. Around fifty-five percent of the shares are in the financial, healthcare, and technology sectors, and about 93.6 percent of the holdings are in American firms.
T.
As is apparent, the T. Rowe Price Value fund provides investors with long-term value by investing in some of the most undervalued stocks. For this, they put a minimum of sixty-five percent of their assets in undervalued equities. Because of today’s inflationary environment, these are among the top funds to put your money in. The fund’s value nature provides a cushion in the market where everything appears overpriced. So, when a recession seems more and more likely, it is one of the most lucrative investments. The investors have to bear an expense ratio of 0.65 and a management fee of 0.55 percent for the T. Rowe Price Value Fund to manage their funds professionally.
Fidelity Zero Large Cap Index (FNILX)
FNILX is a part of the investment company’s incursion into mutual funds with a no-expense ratio. It implies that for every $10,000 invested annually, the cost borne is zero, justifying its zero alias. Fidelity Zero Large Cap Index follows the Fidelity US Large Cap Index and does not track the S&P 500. However, this difference is strictly academic. Its real distinction is that the investor-friendly FNILX does not need to pay a licensing fee to use the S&P name. It keeps the expenses low for the investors.
Thrivent Mid Cap Stock Fund
It is a concentrated active fund that seeks appreciation in the long run and holds merely fifty-eight companies. Thrivent Mid Cap Stock Fund is ideal for investors who are okay with experiencing greater volatility instead of the opportunity to earn higher returns in the long term.
Compared to their large-cap brethren, the mid-cap stock funds are riskier, as they are more volatile than usual. However, the returns have outperformed the S&P MidCap 400 Index, Morningstar Mid-Cap Blend, and Russell Midcap Index Average benchmarks during the ten, five, three, and one-year timeframe. Thrivent Mid Cap Stock Fund has put forty-four percent of its funds in the consumer discretionary, financial, and industrial sectors and 10.7 percent in tech stocks.
Schwab S&P 500 Index Fund
Some people are adamant about investing strictly in the official S&P 500 Index Fund. This fund might be the right pick for you if you are one of them. It is one of the inexpensive funds available, with an expense ratio of only 0.02 percent. It implies that for every $1000 spent, you pay just $0.2. Since the investment fee is small, your returns are similar to the S&P 500’s performance.
Their year-to-fund return in 2021 was the same as that of the S&P 500’s at 31.43 percent. In May 2022, both S&P 500 and the fund dropped by about sixteen percent for the year to date. Since there is no minimum investment amount, you can start with as little as $1.
Invesco QQQ Trust ETF
It is one of the most popular index funds that started trading in 1999 and has only surged in popularity ever since. It keeps a tab on the performance of the biggest non-financial companies in the Nasdaq-100 Index. Managed by Invesco, QQQ is one of the top-yielding large-cap funds in terms of total return in the past fifteen years (till Sept 2021). Their expense ratio is low at only 0.2 percent.
Putting your funds in any market-based investment like bonds, stocks, or crypto implies that the investors may lose 100% of the money if the government or the company issuing the security lands in severe soup. So, measure the risks, analyze the trends, weigh your options, and make your move.
