10+ Best European Index Funds Top Euro ETFs for 2025

For the set-it-and-forget-it investor, this investment strategy is very difficult to match from a time- and cost-efficiency perspective. Many fund management companies offer total market funds at similarly low costs. Holding shares in this fund means you’ll hold large-, mid-, and small-cap companies proportional to the broader market — and at a bargain-basement 0.03% expense ratio. If you stay invested in these index funds and add more money to them periodically, you’ll be well on your way to achieving your investment goals. The stock index fund can grow your money during bull markets, while the bond index fund can reduce your losses in the event of a stock market correction.

We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the investing methodology for the ratings below. The fund got its start in November 1997 and has averaged an annual return of 5.3% since its inception. The three largest sectors are technology (31.2%), financials (14.5%) and health care (10.7%).

• Here’s everything you need to know to get started investing, plus a list of the best index funds to consider.
• The Schwab S&P 500 Index Fund is available to buy from the Schwab company itself or other online brokers.
• Luckily, this strategy is foolproof and can be applied to both large and small cap stocks alike.

My pick for the best Vanguard ETF to buy now

That’s far less true for funds that adopt risky strategies like leveraged investing or that rise and fall with the fortunes of a specific industry like digital assets. So it may come as somewhat of a surprise that many of the best performers among the top 20 index funds for 2023 were of this specialized type, according to data from Morningstar Direct. Advisors often like to guide clients to index funds tracking such broad-based market gauges as the S&P 500 and Nasdaq Composite. EFA’s diversified portfolio of stocks from Europe, the United Kingdom, Australia and Asia is poised for a long-term comeback. Trading at under 14 times earnings and yielding 2.2%, statistically there is value potential here versus what worked the past decade. Bonds function well alongside stocks in a diversified portfolio because they tend to be more stable than equities.

The fund outperformed its multisector bond fund category over the past one, three and five years. FCNTX delivers below average risk and volatility versus category peers. The fund bets big on its top 10 holdings, with a 55% weighting. FCNTX has a roughly 14% stake on Meta platforms, formerly Facebook.

Advantages Of Investing In Index Funds

This gets you fully diversified globally with stocks across all sectors, geographies, and cap sizes. At their market weight, U.S. stocks account for roughly half of the global stock market. VT contains over 8,500 stocks and has an expense ratio of 0.08%. No list of index funds is complete without the stalwart S&P 500 index. It is the most popular index to invest in, comprised of the 500 largest American companies that make up roughly 82% of the entire U.S. stock market.

Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)

This fund’s trailing dividend yield (also known as trailing 12-month yield) is a modest 0.59%. But in the long run, this strong fund diversifies your portfolio. VGIAX’s one-two punch of investment goals helped it beat the overall stock market in 2022 and 2023. Over the past 10 years, this fund’s average annual return beats the S&P 500’s by a nose.

• It features a high-yield, intermediate-term fixed income portfolio.
• VWEAX is run by a team from Wellington Management, which tries to stick to higher-rated junk bonds.
• Investing in these index funds does not require the investor to make a minimum investment.
• The scheme tracks NIFTY 50 Equal Weight Total Return Index, which has given a return of 33.23% in 3 years.

Vanguard Wellington Fund (VWELX)

It also includes at least 90% of the assets on the NASDAQ-100 index and is rebalanced quarterly. Here are some of the best index funds pegged to the S&P 500, due to their low costs. At this point, it’s time to choose which corresponding index fund to buy. We believe everyone should be able to make financial decisions with confidence. Ethan Lang, the owner of Launch Wealth in Hays, Kansas, said funds like leveraged ETFs should never be used for Best index funds 2023 long-term investing.

Specialized Index funds help you to be invested in companies of a particular industry or sector. To buy shares of index funds, you’ll need a brokerage account (for more general investing) or an individual retirement account (IRA). Making regular contributions (monthly, for example) to large index funds often makes up the backbone of a long-term investment strategy. Exchange-traded funds (ETFs) can also achieve the same result and typically have lower investment minimums.

That makes it essential to calibrate the rate of return you expect against the amount of volatility you can accept in your mutual fund investments. When you invest in a mutual fund, you get instant diversification as every dollar is invested in the underlying securities at the same proportion as the overall fund. So even if you put $1 in a fund with 100 securities, your $1 will be spread across all 100 securities. Similarly, your $1 will benefit from the same professional management as an investor with $100,000 in the fund.

Our final list included those funds that beat competitor category returns over 10 years, as well as some funds that also outperformed their index returns. For the one fund that is not 10 years old, we insisted on outperformance versus its category average since inception. Unlike many growth fund managers, Berghuis considers valuations and seeks out companies with sustainable business models. He looks for companies whose managers can grow revenues or earnings by 12% or more annually.

Its 4.38 year average effective duration measures how sensitive the fund’s price will be to changes in interest rates. FADMX will likely gain about 4% with a 1% decline in interest rates, and vice versa. With the U.S. stock markets trading around all-time highs, international stocks also offer more bargains with lower price to earnings ratios. Still, FZILX’s top holdings include familiar brands such as Novo Nordisk (NOVO), Samsung Electronics, Toyota, Nestle (NSRGY), AstraZeneca (AZN) and Shell (SHEL).

To replicate the performance of its chosen index, Index Funds hold the shares that comprise the chosen index in the same proportion as the replicated index. To better understand how Index Funds work, let’s discuss what active management and passive management mean in the case of mutual funds. The significant difference between an Index Fund and a regular stock is that the former is passively managed and the latter is actively managed. In passive management, stocks are given the time to grow without consistently buying and selling shares. This means that the expenses incurred during a usual trade are limited. Therefore, index funds can be a desirable option compared to regular stock market securities, if an individual is looking forward to investing long-term.

The fund’s zero minimum initial investment requirement opens SWPPX to the smallest investors. For investors interested in building that kind of portfolio themselves, Forbes Advisor has developed this list of the 10 mutual funds we deem to be the very best. Based on your personal risk tolerance and time horizon (and subsequent asset allocation), you may want some bonds in your portfolio. Investing in real estate can add some extra diversification to a stock portfolio with its low correlation to the stock market. This is done with Real Estate Investment Trusts, or REITs for short. The Vanguard Real Estate Index Fund is the most popular REIT fund and seeks to track the MSCI US Investable Market Real Estate 25/50 Index.