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How to Choose an S&P 500 Index Fund

A comprehensive comparison of VOO, SPY, IVV, SPLG, and FXAIX to help you find the best low-cost vehicle for the market.

500

Leading US Companies

0.02%

Lowest Expense Ratio

$1.5T+

Total AUM tracked

The "Big 5" S&P 500 Funds Compared

The S&P 500 index tracks the performance of 500 of the largest companies listed on stock exchanges in the United States. While they all track the exact same index, different funds have slightly different fees, structures (ETF vs. Mutual Fund), and minimum investment requirements.

Ticker ↕	Fund Name ↕	Type ↕	Expense Ratio ↕	AUM ↕	Div Yield ↕

Visualizing the Fees

Even tiny differences in expense ratios can compound over decades. SPY is the oldest and most liquid, but charges roughly 3x more than VOO or IVV. SPLG and FXAIX are currently the cheapest options available.

ETF vs. Mutual Fund

ETFs (Exchange-Traded Funds): Examples include VOO, SPY, IVV, and SPLG. They trade on the stock exchange throughout the day like individual stocks. They are generally more tax-efficient in taxable accounts because of how they handle redemptions.

Mutual Funds: Example: FXAIX. These price only once a day at market close. They are excellent for tax-advantaged accounts (like IRAs) because they easily allow for automatic investments of exact dollar amounts (fractional shares), whereas some brokers still don't support fractional ETF buying.

Frequently Asked Questions

How to invest in SP500?

To invest in the S&P 500, you can open a brokerage account and buy shares of an S&P 500 ETF (Exchange-Traded Fund) or a mutual fund that tracks the index, such as VOO, SPY, IVV, or FXAIX.

What is the best SP500 index fund?

The "best" S&P 500 index fund often depends on the lowest fees. SPLG and FXAIX are currently among the cheapest options with expense ratios under 0.03%, while VOO and IVV are also excellent low-cost ETFs.

Should I choose an ETF or mutual fund for the S&P 500?

ETFs are generally more tax-efficient and trade like stocks throughout the day, making them great for taxable accounts. Mutual funds are typically better if your broker allows fractional automatic investments.

Why are there different S&P 500 funds if they track the same index?

Different fund managers (like Vanguard, BlackRock, or Fidelity) offer their own versions of the index. They vary slightly in fees, share price, minimum investment requirements, and whether they are structured as ETFs or mutual funds.

Does it matter which S&P 500 fund I buy?

As long as you choose a fund with a very low expense ratio (under 0.10%), the returns will be virtually identical. The most important factor is simply getting started and consistently investing over time.

Methodology

Data for S&P 500 tracking funds was sourced in real-time via Yahoo Finance API. Expense ratios are based on the latest prospectuses. AUM figures represent total net assets. Yields are trailing 12-month dividend yields. This information is for educational purposes only and does not constitute financial advice.

Cite This Page

Westmount Fundamentals. "How to Choose an S&P 500 Index Fund (2026 Guide)." westmountfundamentals.com/guide-sp500-index-funds, 2026.