Index funds are famous with investors as they promise ownership of a huge variety of stocks, greater variation, and lower risks, all usually at a low cost. That is why many investors, mainly beginners, find this investment type to be superior to individual stocks. In this article, we are going to discuss the 5 best index funds that you can consider for this month.
Best Index Funds For February 2022
Some of the most anticipated indexes fill up the financial news each night, whether it is the Nasdaq Composite, Standard & Poor’s 500 (S&P 500), or the Dow Jones Industrial Average. These index funds are often shorthand for the performance of the market, and investors keep a track of them. The list that has been stated below includes index funds from various companies offering a variety of widely diversified indexes and it also includes some of the lowest-cost funds that are presently being traded on the public market. When it is about the best index funds like these, one of the most crucial factors is your complete cost of return. Let us have a look at the best S&P 500 index fund.
Fidelity ZERO Large Cap Index (FNILX)
The Fidelity ZERO Large Cap Index (FNILX) mutual fund is part of the foray of the investment company into the mutual funds with no expense ratio, so it is the ZERO moniker. The fund does not officially track and S&P 500 which implies that technically it follows the Fidelity U.S. Large Cap Index, but the variation is academic. The real distinction is that investor-friendly Fidelity does not have to offer a licensing fee to avail the S&P name, keeping charges lower for investors.
Shelton NASDAQ-100 Index Direct (NASDX)
The Shelton Nasdaq-100 Index Direct ETF keeps a track of the performance of the biggest non-financial entities in the Nasdaq-100 Index, which has primarily tech entities. This mutual fund started trading in 2000 and has a good record over the previous five and ten years.
Invesco QQQ Trust ETF (QQQ)
The Invesco QQQ Trust ETF is one of the best index fund that tracks the operations of the biggest non-financial entities in the Nasdaq-100 Index. This ETF began trading in 1999, and it is handled by Invesco, which is a fund giant. This fund is the top-acting large-cap fund in respect to total return in the 15 years to Sept. 2021, according to Lipper.
Vanguard S&P 500
As its name states, the Vanguard S&P 500 keeps a track of the S&P 500 index, and it is among the largest funds in the industry with hundreds of billions in the fund. The vanguard index funds started trading in 2010, and it is pegged by Vanguard, which is one of the powerhouses of the fund sector. This is indeed the best index funds for 2022.
SPDR S&P 500 ETF Trust (SPY)
The SPDR S&P 500 ETF is the grandfather of exchange traded funds, having been established all the way back in 1993. It helped to kick off the wave of the ETF investing that has become so famous today. With several billions in the fund, it is among the most famous ETFs. The fund is financed by State Street Global Advisors which is another heavyweight in the industry, and it tracks the S&P 500.
Why Are These Considered As Best Index Funds?
Index funds that are based on important indexes are famous for varied reasons. These funds provide a good return over time, they are varied and a relatively low risk method to invest in stocks. The factors that have been stated below are the reason for their so much fame.
- Attractive Returns: Similar to all stocks, big indexes will fluctuate. But with time indexes have made good returns, like the S&P 500’s long-term record of nearly 10% annually. There are various best index funds to invest in the long-term.
- Diversification: Investors prefer index funds as they provide immediate diversification. With one buy, investors can get a wide swath of entities.
- Lower risk: Because they are diversified, making an investment in an index fund is lower risk than buying a few individual stocks. That does not imply you cannot lose money or that they are as secure as a CD, for instance, but the index will usually make fluctuations a lot less compared to an individual stock.
Here is the list of some of the best index funds on the market, providing investors a way to own a huge collection of stocks at low cost, while still taking the benefits of diversification and decreased risk. With those advantages, it is no surprise that these are some of the biggest funds on the market.