The Top Index Funds Compared
| Fund | Expense Ratio | Holdings | 10-Year Return | Minimum |
|---|---|---|---|---|
| VTI | 0.03% | 3,900+ US stocks | 11.8%/yr | $1 |
| VOO | 0.03% | 500 (S&P 500) | 12.1%/yr | $1 |
| FSKAX | 0.015% | 3,400+ US stocks | 11.8%/yr | $0 |
| FZROX | 0.00% | 2,600+ US stocks | 11.6%/yr | $0 |
| VXUS | 0.07% | 8,000+ intl stocks | 5.2%/yr | $1 |
| BND | 0.03% | 10,000+ US bonds | 1.4%/yr | $1 |
Source: Vanguard, Fidelity fund fact sheets. Returns as of December 2025 (annualized). Past performance does not guarantee future results.
Which Fund Should You Choose?
If You Use Fidelity
- Best choice: FSKAX (0.015% fee, total US market). Functionally identical to VTI but slightly cheaper and no minimum.
- Free alternative: FZROX (0.00% fee). Literally zero cost. Slightly fewer holdings than FSKAX but performance is nearly identical. The catch: only available at Fidelity (not transferable to other brokers without selling).
If You Use Vanguard or Schwab
- Best choice: VTI (0.03% fee, total US market). The gold standard. 3,900+ stocks covering large, mid, and small-cap companies.
- Alternative: VOO (0.03% fee, S&P 500 only). Slightly less diversified (500 vs 3,900 stocks) but returns are nearly identical. Choose this if you specifically want S&P 500 exposure.
VTI vs VOO: Does It Matter?
Barely. Over the last 10 years, VOO returned 12.1% annually vs VTI’s 11.8%. The 0.3% difference comes from VTI including small-cap stocks (which slightly underperformed large-caps in this period). Over 30+ years, they’re expected to perform similarly. Pick either and don’t look back.
The Complete 3-Fund Portfolio
The simplest complete investment strategy that covers the entire global market:
- 60% VTI (or FSKAX): US stocks - your core growth engine
- 30% VXUS (or FTIHX): International stocks - global diversification
- 10% BND (or FXNAX): US bonds - stability and income (increase this % as you age)
This gives you ownership of 12,000+ stocks and bonds across 40+ countries for an average fee of 0.04% per year. That’s $4 annually per $10,000 invested.
Age-Based Allocation Guide
- Age 20–30: 90% stocks (60% VTI + 30% VXUS) / 10% bonds (BND)
- Age 30–40: 80% stocks / 20% bonds
- Age 40–50: 70% stocks / 30% bonds
- Age 50–60: 60% stocks / 40% bonds
- Age 60+: 50% stocks / 50% bonds
Simple rule of thumb: subtract your age from 110 to get your stock percentage. A 30-year-old would hold 80% stocks.
What $500/Month Grows To
Investing $500/month in VTI at the historical 10% average return:
- After 10 years: $102,000 (you invested $60,000)
- After 20 years: $382,000 (you invested $120,000)
- After 30 years: $1,130,000 (you invested $180,000)
The difference between $180K invested and $1.13M is compound growth. This is why starting early matters more than starting big.
Target-Date Funds: The True Set-and-Forget Option
If even a 3-fund portfolio feels like too much to manage, consider a target-date fund:
- Fidelity Freedom Index 2060 (FDKLX): 0.12% fee. Automatically adjusts stocks/bonds as you approach retirement year 2060.
- Vanguard Target Retirement 2060 (VTTSX): 0.08% fee. Same concept, Vanguard’s version.
These are genuinely excellent for people who want to invest and never think about it again. One fund, automatic rebalancing, done.
Common Mistakes to Avoid
- Overthinking the choice: VTI, VOO, FSKAX - they’re all excellent. Spending weeks deciding between them costs you more in missed market time than any fee difference.
- Chasing past performance: Last year’s best-performing fund won’t necessarily be next year’s. Stick with broad market funds.
- Paying for active management: 90% of actively managed funds underperform index funds over 15 years. Don’t pay 1% for worse results.
- Not investing internationally: The US won’t always outperform. VXUS provides insurance against US underperformance.
- Checking too often: Index funds are for decades, not days. Check quarterly at most.
Source: Vanguard, Fidelity fund prospectuses, S&P SPIVA Scorecard 2025, Morningstar performance data