Subtracting each fund’s costs from the index’s theoretical return would provide the take-home performance. If all S&P 500 funds were identically managed, those expense ratios would tell the entire story. However, with cheaper options readily available, there’s no reason to pay more. By ordinary standards, that expense cutoff is exceedingly low. Eleven of those funds can safely be discarded, as their expense ratios are above 0.05%. It is easy enough to recognize the intent of “institutional” or “retirement” share classes, but what about funds that are marked with a “G” or a “K” or a “Y”? The Cheapest 6Įventually, after much data mucking, I narrowed the field down to 17 true S&P 500 funds that are available for retail investors who buy their funds directly. Determining the status of such funds is laborious. They either sell only to institutions, or they distribute through financial advisors. Many of the remaining S&P 500 funds cannot be purchased by do-it-yourself investors. An unpleasant surprise for those who had not been paying attention!
Thus, while the index gained 28.7% last year, Fidelity ZERO Large Cap Index placed 2 percentage points lower, at 26.7%. companies,” it is not in fact an S&P 500 clone. Although the fund invests in “stocks of the largest 500 U.S.
The most notable case is Fidelity ZERO Large Cap Index FNILX.
Other funds roughly echo the S&P 500 but do not attempt to mimic the benchmark exactly.
