Morningstar

The Best Index Funds for 2026

These low-cost index mutual funds and ETFs earn Morningstar’s top rating.

 and
Securities in This Article
Vanguard Total Bond Market Index Fund ETF Shares
(BND)
Schwab U.S. Dividend Equity ETF™
(SCHD)
State Street® SPDR® S&P 500® ETF Trust
(SPY)
Vanguard S&P 500 Value Index Fund ETF Shares
(VOOV)
Schwab International Equity ETF™
(SCHF)

This article mentions funds that have an issuer-initiated rating and/or track a Morningstar Index. For full disclosure information, please refer to the specific funds, which are demarcated with a * symbol, listed below.

Index funds are

passive investments
. They track an index with the aim of replicating that index’s performance minus investing expenses. Active funds, meanwhile, are led by managers who choose particular securities to outperform an index.

Index funds are great choices for beginners and seasoned investors alike. However, some index funds are better than others. The best index funds closely track their indexes, minimize costs, and follow sensible rules-based indexes.

Why Are Index Funds Such a Popular Investing Option?

The first index fund, Vanguard 500 Index, debuted in 1976. Since then, funds that index the US stock market have exploded in popularity. And index funds that focus on international stocks and bonds are becoming more popular, too.

Why? Many argue that buying and holding the broad market (whatever that market may be) generates better results than trying to beat that same market through actively selecting securities. Indeed, Morningstar research has confirmed that, in many investment categories, index funds have outperformed active funds over time.

Best Index Funds to Buy

A good place to start your search for top index exchange-traded funds and mutual funds is with the

Morningstar Medalist Rating
. Funds that earn our highest rating of Gold are those that we think are most likely to outperform over a full market cycle.

Here’s a list of some of the best low-cost index mutual funds and ETFs. This list is broken down by the three main asset classes represented in many investors’ portfolios: US stocks, international stocks, and bonds.

Best Index Funds: US Stocks

More than 200 index mutual funds and ETFs land in one of the broad US stock Morningstar Categories and earn the top Medalist Rating of Gold with an

analyst-assigned percentage
equaling at least 80% as of July 23, 2026.

Here’s a sampling of just a few of the top-rated index funds broken down by various US stock subcategories.

Top S&P 500 Funds

  1. Fidelity 500 Index FXAIX
  2. iShares Core S&P 500 ETF IVV
  3. Schwab S&P 500 indexPX
  4. State Street SPDR Portfolio S&P 500 ETF SPY
  5. Vanguard S&P 500 ETF VOO

The S&P 500 index is considered by many to be the standard benchmark for measuring US stock market performance, so it’s no wonder that mutual funds and ETFs tracking that index are popular choices for exposure to US stocks. About 80% of an S&P 500 index fund’s portfolio is invested in large-cap stocks today, with the remaining 20% spread across mid- and small-cap stocks.

Morningstar Investor members can access a full list of top large-cap stock index funds and ETFs.

Top Total US Stock Market Funds

  1. iShares Core S&P Total US Stock Market ETF ITOT
  2. Schwab US Broad Market ETF SCHB
  3. State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF SPTM
  4. T. Rowe Price Total Equity Market Index POMIX
  5. Vanguard Total Stock Market ETF VTI

Some investors prefer to get exposure to a larger swath of US stocks than the S&P 500 provides: Enter total market and broad market index funds. These mutual funds and ETFs track indexes with more exposure to mid- and small-cap names. The funds on the list above, for instance, track between 1,100 and 3,500 stocks in about a 70% large-cap/30% mid- and small-cap ratio.

Top Growth Stock Index Funds

  1. Fidelity Large Cap Growth Index FSPGX
  2. iShares Core S&P US Growth ETF IUSG
  3. iShares Russell 1000 Growth ETF IWF
  4. Schwab US Large-Cap Growth ETF SCHG
  5. Vanguard Growth ETF VUG

S&P 500 and total market index funds blend value stocks and growth stocks. However, some investors like to control their portfolio’s allocation across those two types of stocks and may therefore prefer to own growth index funds and ETFs alongside value index funds and ETFs rather than one fund that includes both styles.

Morningstar Investor members can access a complete list of top growth stock index funds and ETFs.

Top Value Stock Index Funds

  1. Fidelity Large Cap Value Index FLCOX
  2. iShares S&P 500 Value ETF IVE
  3. Schwab US Large-Cap Value ETF SCHV
  4. Vanguard S&P 500 Value ETF VOOV
  5. Vanguard Value ETF VTV

Here’s a selection of top value stock index mutual funds and ETFs that investors can use to complement a highly rated growth stock index mutual fund or ETF.

Morningstar Investor members can access a complete list of top value stock index funds and ETFs.

Top Small-Cap Index Funds

  1. iShares Core S&P Small-Cap ETF IJR
  2. Schwab Fundamental U.S. Small Company Index Fund SFSNX
  3. Schwab US Small-Cap ETF SCHA
  4. State Street SPDR Portfolio S&P 600 Small Cap ETF SPSM
  5. Vanguard Small-Cap ETF VB

Index funds tracking the US stock market, as defined by either the S&P 500 or a broader market index, are heavy in large-cap stocks. Investors who’d like more exposure to small-cap US companies can choose from among several index mutual funds and ETFs. The above list is just a sampling of highly rated small-cap options. There are top-rated index funds focusing on smaller companies broken down by value and growth, too.

Morningstar Investor members can access a complete list of top small- and mid-cap stock index funds and ETFs.

Top Dividend Stock Index Funds

  1. Fidelity High Dividend ETF FDVV
  2. Schwab US Dividend Equity ETF SCHD
  3. Vanguard Dividend Appreciation ETF VIG
  4. Vanguard High Dividend Yield ETF VYM

Many investors like dividend stocks, either for the income they generate, their defensive qualities, or both. There are many good dividend stock index mutual funds and ETFs to choose from. Some track higher-yielding dividend indexes while others follow lower-yielding indexes featuring companies with greater dividend growth opportunities.

Morningstar Investor members can access a complete list of top dividend stock index funds and ETFs.

To fully understand an index fund’s strategy, be sure to read its Morningstar fund analyst report.

Best International Stock Index Funds

About four dozen index mutual funds and ETFs landing in one of Morningstar’s international-stock categories earn the top Morningstar Medalist Rating of Gold and have an analyst-assigned percentage equaling at least 80% as of July 23, 2026.

Here are a few top international index funds from the group that focus on large-cap stocks in developed markets.

  1. Fidelity Total International Index FTIHX
  2. iShares Core MSCI Total International Stock ETF IXUS
  3. Schwab International Equity ETF SCHF
  4. State Street SPDR Portfolio Developed World ex US ETF SPDW
  5. Vanguard Total International Stock ETF VXUS

There’s a good deal of variety among the top-rated international index funds and ETFs. Some funds track global indexes that include US stocks; others follow global indexes that exclude US stocks. Some invest in specific regions or countries only and are therefore better suited to the fringes of a portfolio. Consult the investment’s analyst report for more details about what index the mutual fund or ETF tracks.

Morningstar Investor members can access a complete list of top index funds and ETFs.

Best Bond Index Funds

About five dozen index mutual funds and ETFs landing in one of Morningstar’s taxable and municipal bond categories earn the top Morningstar Medalist Rating of Gold and have an analyst-assigned % equaling at least 80% as of July 23, 2026.

Here’s a sampling of just a few of the top-rated index funds broken down by various bond subcategories.

Morningstar Investor members can access a complete list of top taxable bond index funds and ETFs.

Top Core Bond Index Funds

  1. Fidelity U.S. Bond Index FXNAX
  2. iShares Core U.S. Aggregate Bond ETF AGG
  3. Schwab U.S. Aggregate Bond ETF SCHZ
  4. State Street SPDR Portfolio Aggregate Bond ETF SPAB
  5. Vanguard Total Bond Market ETF BND

Several of the best broad-based bond index funds land in Morningstar’s intermediate core bond category. They make great choices to anchor the bond portion of an investor’s portfolio, assuming the goals for the money are six or more years away.

Top Short-Term Bond Index Funds

  1. iShares 1-5 Year Investment Grade Corporate Bond ETF IGSB
  2. Schwab Short-Term US Treasury ETF SCHO
  3. State Street SPDR Short Term Treasury ETF SPTS
  4. Vanguard Short-Term Bond ETF BSV

Those saving for a shorter-term goal in the next three to five years might consider short-term bond index funds and ETFs instead. There are many good bond index funds focusing on the short end of the yield curve. Some focus on US Treasuries while others favor corporate bonds; other short-term bond index funds dabble in both.

Top TIPS Index Funds

  1. Fidelity Inflation-Protected Bond Index Fund FIBUX
  2. Pimco 1-5 Year US TIPS Index ETF STPZ
  3. Schwab US TIPS ETF SCHP
  4. Vanguard Short-Term Inflation-Protected Securities ETF VTIP

TIPS index funds track indexes focused on Treasury Inflation-Protected Securities. TIPS index mutual funds and ETFs are especially useful for retirees who are in drawdown mode: They can use TIPS funds to protect their portfolios from inflation.

The Benefits of Investing in Low-Cost Index Funds

Any historical performance advantage aside, there are several benefits to investing in index funds.

  • Index funds are usually lower in cost than similar actively managed funds.
  • Index funds perform like the market they’re tracking; as such, there aren’t many surprises in performance.
  • Index funds don’t face “key-person risk,” which means that manager changes aren’t a big deal, since there’s no active security selection involved.
  • Index funds are often more tax-friendly than similar active funds.

Should You Invest in an Index Mutual Fund or ETF?

Investors can access passive strategies through two different investment products:

mutual funds
and ETFs.

One product isn’t better than the other; choosing the right wrapper depends on personal preferences. Investors who value trading flexibility or maybe have a few dollars to invest might prefer an ETF, while those accessing index funds via a company-sponsored retirement plan are more than likely buying mutual funds.

Read Cage Match: Traditional Index Funds vs. ETFs to learn more about the differences between mutual funds and ETFs.

The Best Index Funds for Beginners

How should new investors choose the best index funds? We’re fans of keeping things simple.

Christine Benz, Morningstar director of personal finance and retirement planning, suggests that minimalist investors focus on owning a US stock index fund, an international stock index fund, and a bond index fund; the proportions will depend on life stage.

Long Time Horizon

  • Anticipated Time Horizon to Retirement: 35-40 years
  • Risk Tolerance/Capacity: High
  • Target Stock/Bond Mix: 95/5

Portfolio Allocations

  • 55% Broad US Market Index Fund/ETF
  • 40% Broad International Stock Market Index Fund/ETF
  • 5% Broad Bond Market Index Fund/ETF

Moderate Time Horizon

  • Anticipated Time Horizon to Retirement: 20-25 years
  • Risk Tolerance/Capacity: Moderate
  • Target Stock/Bond Mix: 80/20

Portfolio Allocations

  • 48% Broad US Market Index Fund/ETF
  • 32% Broad International Stock Market Index Fund/ETF
  • 20% Broad Bond Market Index Fund/ETF

Short Time Horizon

  • Anticipated Time Horizon to Retirement: 2-5 years
  • Risk Tolerance/Capacity: Low
  • Target Stock/Bond Mix: 50/50

Portfolio Allocations

  • 35% Broad US Market Index Fund/ETF
  • 15% Broad International Stock Market Index Fund/ETF
  • 50% Broad Bond Market Index Fund/ETF

Find More of the Best Index Funds

Investors can use our Morningstar Investor Screener tool to find more top index mutual funds and ETFs. Here’s how to get started and some possible filters to use.

Access the Prebuilt Screen. Visit Morningstar’s Best Index Funds list. Click on the blue “Screen with Investor” button. The full list of all index funds and ETFs will populate in the screener. From there, you can filter on other metrics that matter to you.

Medalist Rating (Overall): You can choose to filter the list by Medalist Rating, focusing on mutual funds and ETFs with our highest rating of Gold, or you can continue to include those funds rated Silver and Bronze, too.

Share Class Type: The index funds list includes both mutual funds and ETFs. If you want to narrow the list to ETFs only, click on the Share Class Type drop-down box and select ETF. Or if you want to include mutual funds only, select mutual funds in the drop-down box.

Asset Class or Morningstar Category: You can refine the list further by choosing what asset class you’d like to focus on (US stocks, international stocks, or bonds, for instance). And if you’d like more granularity, you can filter on Morningstar Category.

Using the “+ Filter” button, you can continue to further filter your list by expenses, branding name (think of that as an asset manager), and other factors

Editor’s Note: One or more of the Vanguard Funds mentioned in this report track an index created or licensed by Morningstar.

The author or authors own shares in one or more securities mentioned in this article. Find out about Morningstar’s editorial policies.

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