Best Index Funds for Beginners in 2025
If you’re just getting started with investing, index funds are one of the easiest and smartest ways to build wealth over time. They offer instant diversification, low fees, and a simple way to tap into the long-term growth of the stock market.
In 2025, there’s no shortage of excellent options. Whether you’re using a Roth IRA, a taxable brokerage account, or even a robo-advisor, these beginner-friendly index funds can set a strong foundation for your portfolio.
Let’s break down the best index funds for beginners based on fees, performance, and accessibility.
Why Index Funds Are Great for Beginners
Before we get into the list, here’s why index funds make so much sense:
- Low cost: Most index funds have expense ratios under 0.10%, which means more of your money stays invested.
- Diversification: With a single purchase, you own hundreds or even thousands of companies.
- Passive growth: You don’t have to guess which stock will win. You just ride the market’s long-term trend.
- Less emotional investing: Fewer decisions = fewer mistakes.
Now let’s look at top picks in 2025.
1. Vanguard Total Stock Market Index Fund (VTSAX)
- Type: U.S. Total Market Index Fund
- Expense Ratio: 0.04%
- Minimum Investment: $3,000 (or buy ETF version VTI with no minimum)
- Diversification: ~4,000 U.S. stocks
- 5-Year Annualized Return: ~11.1% (as of early 2025)
Why It’s Great:
VTSAX gives you exposure to every segment of the U.S. stock market, from large-cap giants like Apple and Microsoft to small-cap startups. It’s a one-stop-shop for U.S. equity investing.
Ideal For:
Beginners who want a core holding in a retirement or brokerage account.
2. Fidelity ZERO Total Market Index Fund (FZROX)
- Type: U.S. Total Market
- Expense Ratio: 0.00%
- Minimum Investment: None
- Diversification: ~2,500+ stocks
- 5-Year Annualized Return: ~10.8%
Why It’s Great:
It’s hard to beat zero fees. FZROX was created to bring in new investors, and it does a solid job mirroring the total U.S. market—without costing you a penny in annual fees.
Ideal For:
First-time investors using a Fidelity account, especially those starting with smaller amounts.
3. Schwab S&P 500 Index Fund (SWPPX)
- Type: Large-Cap U.S. Index
- Expense Ratio: 0.02%
- Minimum Investment: None
- Diversification: ~500 large-cap stocks
- 5-Year Annualized Return: ~10.9%
Why It’s Great:
If you want pure exposure to the top 500 U.S. companies, SWPPX delivers with ultra-low costs and no investment minimums. It’s ideal for taxable accounts and IRAs.
Ideal For:
Investors who want S&P 500 exposure without paying Vanguard’s minimums.
4. Vanguard FTSE Global All Cap ex US Index Fund (VFWAX)
- Type: International Stocks
- Expense Ratio: 0.11%
- Minimum Investment: $3,000
- Diversification: ~7,000 companies in 45+ countries
- 5-Year Annualized Return: ~6.2%
Why It’s Great:
Diversifying beyond the U.S. is smart, and VFWAX gives you broad global exposure outside the U.S. Europe, Asia, and emerging markets alike.
Ideal For:
Those looking to balance their U.S. exposure with international holdings.
5. Fidelity U.S. Bond Index Fund (FXNAX)
- Type: U.S. Investment Grade Bonds
- Expense Ratio: 0.025%
- Minimum Investment: None
- Yield (as of 2025): ~4.4%
- Volatility: Low to moderate
Why It’s Great:
Every good portfolio needs a cushion. FXNAX is a reliable core bond fund that helps reduce volatility and provide steady income, especially as interest rates stabilize.
Ideal For:
Risk-averse investors or those building balanced portfolios with both stocks and bonds.
At a Glance: Best Index Funds for Beginners (2025)
| Fund | Type | Expense Ratio | Minimum Investment | Best For |
|---|---|---|---|---|
| VTSAX | Total U.S. Market | 0.04% | $3,000 | All-in-one U.S. exposure |
| FZROX | Total U.S. Market | 0.00% | None | Beginners with small amounts |
| SWPPX | S&P 500 | 0.02% | None | Large-cap focused investors |
| VFWAX | International | 0.11% | $3,000 | Global diversification |
| FXNAX | Bonds | 0.025% | None | Portfolio stability & income |
How to Choose the Right One
Ask yourself:
- Do I want exposure to the entire U.S. market or just the S&P 500?
- Am I starting small or investing a lump sum?
- Do I need global or bond diversification?
You don’t have to pick just one. Many beginner portfolios start with a blend—like 80% VTSAX (stocks) and 20% FXNAX (bonds)—for growth and stability.
Final Tip: Use the ETF Versions If You Want Flexibility
Most of the funds above also have ETF counterparts with no minimums and real-time trading, which makes them easier to manage in smaller amounts or through apps like Fidelity, Vanguard, Schwab, or Robinhood.
Next Up: Curious about all-in-one funds that automatically adjust over time?
Check out: Are Target-Date Funds a Good Alternative?
