Bankrate's 10 best index funds for 2026 offer low ratios and strong 5-year returns

Whether you're a beginner or retiree, these ETFs are accessible investment vehicles that often outperform their actively managed counterparts

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, US, on Tuesday, April 8, 2025. (Michael Nagle/Bloomberg via Getty Images).

Investing doesn't have to be complicated. For decades, index funds have offered a straightforward path to building wealth — and the evidence for their effectiveness keeps mounting. Rather than trying to beat the market by picking individual stocks, index funds simply track it. The result is a low-cost, diversified investment that's outperformed the majority of actively managed funds.

The appeal is easy to understand. A single share of an S&P 500 index fund gives you ownership in hundreds of companies across every major sector of the U.S. economy. A Nasdaq $NDAQ-100 fund tilts toward the technology companies that have driven much of the market's growth over the past two decades. A total market fund casts the widest net of all, capturing small, mid, and large-cap companies in one instrument. Whatever your risk tolerance or investment horizon, there is an index fund built for it.

Cost is where index funds truly shine. The average stock index mutual fund charges just 0.05% per year on an asset-weighted basis — or $5 for every $10,000 invested. Some funds charge nothing at all. Compare that to the average actively managed stock mutual fund, which charges 0.42%, and the math becomes compelling over any meaningful time horizon.

The funds below, drawn from Bankrate's 2026 index fund rankings, represent some of the most widely held and cost-efficient options available. They span four major benchmarks: the S&P 500, the Nasdaq-100, the Russell 2000, and the Dow Jones Industrial Average. Each has a track record of at least five years, and several have been trading since the 1990s.

These are not recommendations. Every investor's situation is different, and past performance is no guarantee of future returns. What they are is a starting point, a set of well-established, low-cost instruments that have served long-term investors well.

1. Fidelity ZERO Large Cap Index (FNILX)

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Most index funds are cheap, but this one is free. Fidelity's ZERO Large Cap Index charges no expense ratio by tracking its own Fidelity U.S. Large Cap Index rather than licensing the S&P 500 name, passing those savings directly to investors. It's a strong choice for those seeking a broadly diversified core holding at the lowest possible cost. Its five-year annualized return stands at 13.2%.

2. Vanguard S&P 500 ETF (VOO)

VOO tracks the S&P 500 and holds hundreds of billions in assets, making it among the most widely held ETFs on the market. Backed by Vanguard — one of the most investor-friendly names in the fund industry — it pairs enormous scale with an expense ratio of just 0.03%, or $3 per $10,000 invested annually. Its five-year annualized return is 13.7%.

3. SPDR S&P 500 ETF Trust (SPY)

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Founded in 1993, SPY was the first U.S.-listed ETF and helped establish the now-dominant model of passive, exchange-traded investing. Sponsored by State Street $STT Global Advisors, it remains one of the most actively traded funds in the world, with hundreds of billions under management, an expense ratio of 0.095%, and a five-year annualized return of 13.6%.

4. iShares Core S&P 500 ETF (IVV)

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Launched in 2000 and managed by BlackRock $BLK, one of the largest fund companies in the world, IVV is one of the longest-tenured S&P 500 ETFs available. It matches VOO's 0.03% expense ratio and posts an identical five-year annualized return of 13.7%, making it a compelling option for investors already in the iShares ecosystem.

5. Schwab S&P 500 Index Fund (SWPPX)

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SWPPX is the cheapest mutual fund on Bankrate's list, charging just 0.02% per year — $2 for every $10,000 invested. Backed by Charles Schwab $SCHW and trading since 1997, it reflects the firm's longstanding focus on investor-friendly products. It has returned 13.7% annually over the past five years.

6. Shelton NASDAQ-100 Index Direct (NASDX)

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For investors who want Nasdaq $NDAQ-100 exposure through a mutual fund rather than an ETF, NASDX has been an option since 2000. It focuses on the largest non-financial companies in the index — primarily technology and growth-oriented businesses — and carries an expense ratio of 0.52%, with a five-year annualized return of 13.5%.

7. Invesco QQQ Trust ETF (QQQ)

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QQQ tracks the same Nasdaq $NDAQ-100 universe as NASDX but does so at a fraction of the cost, with an expense ratio of 0.18%. Managed by Invesco and trading since 1999, it has become one of the most actively traded ETFs in the world for investors seeking technology and growth exposure. Its five-year annualized return is 13.6%.

8. Vanguard Russell 2000 ETF (VTWO)

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VTWO tracks roughly 2,000 of the smallest publicly traded companies in the U.S., offering a diversification angle distinct from large-cap-heavy S&P 500 funds. True to Vanguard's form, it keeps costs low at 0.06% annually. Its five-year annualized return of 4.7% reflects the underperformance of small-cap stocks relative to large-caps in recent years, though the fund remains a useful portfolio complement for investors seeking broader market exposure.

9. Vanguard Total Stock Market ETF (VTI)

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VTI covers the entire publicly traded U.S. equity market — small, mid, and large-cap companies across all sectors — in a single fund. Trading since 2001 and charging just 0.03% annually, it is a natural core holding for investors seeking maximum diversification. Its five-year annualized return is 12.1%.

10. SPDR Dow Jones Industrial Average ETF Trust (DIA)

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DIA tracks the 30-stock Dow Jones Industrial Average and is one of the oldest ETFs on the market, having debuted in 1998 under State Street $STT Global Advisors. With tens of billions under management, an expense ratio of 0.16%, and a five-year annualized return of 11.5%, it offers targeted exposure to some of the most established blue-chip companies in the U.S. economy.

Performance data as of Feb. 20.

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