Discover ten standout low-cost index funds and ETFs to optimise returns through diversification and minimal fees.

Index funds have revolutionised investment strategies by offering a cost-effective and transparent approach to achieving financial growth. These funds, which can track various markets, styles, and sectors, present a straightforward yet powerful way for individuals to engage with equities, bonds, and other asset classes. They hold particular appeal due to their low expenses, broad diversification, and passive nature, enabling long-term wealth building with minimal complications. Originating from the late 19th century with simple indices like the Dow Jones Industrial Average, index construction has since evolved to include intricate strategies, such as using growth scores and composite metrics for stock selection. Despite some complexity in modern indices, evidence still suggests simplicity often yields competitive, if not superior, results. Examples supporting the effectiveness of indexing include the SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Invesco S&P 500 GARP ETF (SPGP).

This article spotlights ten standout low-cost index funds and ETFs for 2025, prioritising high returns and minimal fees. Among these are renowned options like Vanguard’s Total Stock Market Index Fund Admiral Shares (VTSAX), delivering extensive exposure to over 3,600 U.S. stocks across sectors with a nominal 0.04% expense ratio. If global diversification appeals, the Vanguard Total World Stock Index Fund Admiral Shares (VTWAX) offers access to 9,700 stocks worldwide for an expense of 0.1%. For those seeking simplicity, the Vanguard S&P 500 ETF (VOO) provides low-cost access to 500 major U.S. equities while maintaining historical returns.

Broader exposure to U.S. markets is achievable through funds like the Vanguard Russell 1000 ETF (VONE) or the Schwab 1000 Index Fund (SNXFX), combining coverage of small to large-cap companies. The Fidelity Zero Large Cap Index Fund (FNILX), with its zero expense ratio, is particularly noteworthy for the budget-conscious. Income-focused investors might opt for Vanguard Dividend Appreciation ETF (VIG) or iShares Core High Dividend ETF (HDV), prioritising reliable firms with increasing or substantial dividend payouts. On the other hand, the Invesco Nasdaq 100 ETF (QQQM) caters to growth enthusiasts, highlighting tech-heavy Nasdaq giants. Meanwhile, the Invesco S&P 500 Equal Weight ETF (RSP) mitigates concentration risks by equally weighting its components.

Collectively, these funds exemplify how low-cost index strategies balance efficiency with the potential for compelling returns. Whether seeking market-wide exposure, income through dividends, or sector-specific growth, these options have the tools to support a range of investment goals in 2025 and beyond.