Best S&P 500 Index Funds & ETFs in 2026 | VOO vs FXAIX vs SPY Compared

The best S&P 500 index fund to buy in 2026 is whichever one your brokerage offers with the lowest expense ratio. The honest truth is that VOO, FXAIX, IVV, and SPLG all track the exact same 500 companies using the same methodology from S&P Dow Jones Indices. The performance difference between them over any 10-year period is measured in hundredths of a percent, far smaller than any market fluctuation. Where the decision matters is in the expense ratio you pay every year and whether the fund is available commission-free at your brokerage.

S&P 500 Index Fund Comparison | The Core Options in 2026

FXAIX is the Fidelity 500 Index Fund, a traditional mutual fund that charges 0.015% annually. On a $100,000 balance, that is $15 per year. It is available only at Fidelity with no account minimum and no trading commission. It is a mutual fund, not an ETF, which means it prices once per day at market close rather than trading throughout the day like a stock. For long-term investors who contribute monthly and hold for decades, this distinction is irrelevant.

VOO is the Vanguard S&P 500 ETF, charging 0.03% annually with over $590 billion in assets under management as of June 2026. VOO trades on the NYSE like a stock, so you can buy and sell any time the market is open. Vanguard's ownership structure, where the funds themselves own the company, creates a structural incentive to keep costs low. VOO is available commission-free at Vanguard, Fidelity, and Schwab, among others.

SPY is the SPDR S&P 500 ETF Trust, the original S&P 500 ETF launched in January 1993. It charges 0.0945%, roughly six times more than VOO or IVV, but it is the world's most traded ETF by daily dollar volume, making it the preferred choice for institutional traders and options market makers. For a buy-and-hold investor, SPY's higher expense ratio costs about $94.50 per year on a $100,000 investment versus $30 for VOO. Over 30 years with 10% average returns, that $64.50 annual difference compounds to approximately $10,600 in extra costs. The higher liquidity of SPY is irrelevant if you are holding for decades.

IVV is the iShares Core S&P 500 ETF from BlackRock, charging 0.03% and holding over $570 billion in assets. IVV is functionally identical to VOO in structure and cost. It is the better choice for investors at brokerages where Vanguard ETFs may not be commission-free.

Beyond the S&P 500 | Total Market and International Funds

The S&P 500 covers 500 large US companies, representing roughly 80% of total US stock market capitalization. For broader diversification, total stock market index funds include mid-cap and small-cap companies as well. VTI (Vanguard Total Stock Market ETF, 0.03%) covers approximately 3,600 US companies. ITOT (iShares Core S&P Total US Stock Market ETF, 0.03%) is the BlackRock equivalent. For Fidelity account holders, FZROX (Fidelity ZERO Total Market Index Fund) charges literally 0.00% and covers the total US market, though it is exclusive to Fidelity accounts.

For international diversification, VXUS (Vanguard Total International Stock ETF, 0.08%) covers approximately 8,500 non-US companies across developed and emerging markets. A common portfolio recommendation for beginner investors is VT (Vanguard Total World Stock ETF, 0.07%), which holds roughly 9,500 stocks across US and international markets in a single fund. Adding international exposure reduces dependence on any single country's economic performance.

Which Index Fund Is Right for You | The Simple Rule

The practical answer is: open an account at Fidelity, Vanguard, or Schwab, then buy the lowest-cost S&P 500 or total market index fund available at that brokerage. At Fidelity, that is FXAIX (0.015%) or FZROX (0.00%). At Vanguard, that is VTSAX (0.04% mutual fund equivalent of VTI) or VOO. At Schwab, that is SCHB (0.03% total market ETF).

If you are brand new to investing, the beginner guide to stock market investing walks through the account setup sequence before you need to choose a specific fund. The right account type (Roth IRA vs. 401k vs. taxable) matters more than which S&P 500 fund you choose, because account type determines how your gains are taxed. For that decision, the Roth IRA vs Traditional IRA guide covers the comparison in detail. For context on why S&P 500 index funds have performed so well recently, the S&P 500 record high analysis for June 2026 explains the current market drivers. And to make sure you are sizing your investment contributions correctly within your overall budget, see the 50/30/20 budget rule guide.

Frequently Asked Questions