Keeping investment costs low is one of the most reliable ways to grow long-term wealth — and low-cost index funds make that easier than ever. Predictions from Morningstar highlight expense ratios as a defining factor in 2026 ETF performance, with the lowest-cost funds consistently outpacing higher-fee rivals over time. Pairing smart fund selection with expense tracking tools can sharpen your overall financial picture even further. Whether you're just starting out or looking to optimize an existing portfolio, these four funds offer exceptional value. Let's dive in!
Quick Answer
Low-cost index funds minimize fees to maximize long-term returns. Top options include broad market ETFs with expense ratios as low as 0.03%, such as those tracking the S&P 500 or total market. Morningstar confirms lowest-cost funds consistently outperform higher-fee rivals over time, making expense ratios a critical factor when selecting funds in 2026.
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Summary Table
| Item Name | Expense Ratio / Min. Investment | Best For | Website |
|---|---|---|---|
| State Street SPDR Portfolio S&P 500 ETF | 0.02% expense ratio / No minimum | Large-cap US exposure, high-liquidity ETF investors | Visit Site |
| Fidelity 500 Index Fund | 0.015% expense ratio / No minimum | Cost-conscious investors wanting precise S&P 500 tracking | Visit Site |
| BNY Mellon US Large Cap Core Equity ETF | 0.00% expense ratio / No minimum | Fee-sensitive investors seeking zero-cost US equity exposure | Visit Site |
| Vanguard Total World Stock ETF | 0.07% expense ratio / No minimum | Global diversification across US and international markets | Visit Site |
4 Top Low-Cost Index Funds to Buy in 2026
Below you'll find detailed information about each option, including what makes them unique and their key benefits.
1. State Street SPDR Portfolio S&P 500 ETF
The SPDR Portfolio S&P 500 ETF (SPLG) is one of the most cost-efficient ways to track the S&P 500, making it a strong candidate for investors building a passive portfolio. With an expense ratio of just 0.02%, it's among the cheapest ETFs available, allowing more of your returns to compound over time rather than being eaten by fees.
Key details:
- Expense ratio: 0.02% annually
- Tracks all 500 companies in the S&P 500 index
- Trades on major exchanges like any stock — no minimums beyond one share
2. Fidelity 500 Index Fund
The Fidelity 500 Index Fund (FXAIX) delivers broad S&P 500 exposure at an expense ratio of 0.015%, making it one of the lowest-cost mutual funds for passive investors. Unlike ETFs, it's priced once daily and settles as a mutual fund, which suits investors who prefer automatic contributions and fractional investing without worrying about share prices.
Key details:
- Expense ratio: 0.015% — cheaper than most competing S&P 500 funds
- No investment minimum required
- Supports automatic monthly contributions — ideal for dollar-cost averaging
3. BNY Mellon US Large Cap Core Equity ETF
The BNY Mellon US Large Cap Core Equity ETF stands out as one of the most compelling zero-expense-ratio options for cost-conscious index investors. It tracks large-cap U.S. equities with a 0.00% expense ratio, meaning you keep every dollar of return the market delivers. This makes it a direct answer for investors seeking minimal-cost exposure to blue-chip American companies.
Key details:
- Expense ratio: 0.00% — no annual management fee
- Tracks large-cap U.S. stocks (similar universe to the S&P 500)
- Best for: Buy-and-hold investors prioritizing zero ongoing costs
4. Vanguard Total World Stock ETF
For investors wanting global diversification within a single low-cost index fund, VT (Vanguard Total World Stock ETF) covers both U.S. and international equities across developed and emerging markets. Its 0.07% expense ratio is well below the average for comparable global funds, and there's no minimum purchase beyond one share. Using free budget templates can help you plan how much to allocate toward broad-market funds like this one.
Key details:
- Expense ratio: 0.07% — covers 9,000+ stocks worldwide
- No minimum investment beyond share price
- Best for: Investors wanting one-fund global diversification
Final Words
Low-cost index funds remain one of the simplest paths to long-term wealth building. Whether you prioritize broad market exposure, dividend growth, international diversification, or bond stability, there's a fund here for your goals — pair your choice with free investing education to build real confidence before committing your money.