Best Index Funds for September 2025 in United States

Why Index Funds Remain a Smart Choice

Best Index Funds for September 2025 in United States: Index funds—whether mutual funds or ETFs—offer low-cost, diversified exposure to major market segments like the S&P 500. They’re especially compelling for long-term investors because:

• Lower fees mean more returns stay in your pocket over time—every basis point matters.
• Built-in diversification provides broad market access without needing to pick individual stocks.
• Proven strategy—championed by investors like Warren Buffett—suits most individual investors.

1. Top S&P 500 Index Funds Today

September 2025 brings robust options tracking the S&P 500, with low costs and easy access:

• VFIAX (Vanguard 500 Index Fund – Admiral Shares)
  • Expense ratio: ~0.04%, minimum: $3,000.
• SWPPX (Schwab S&P 500 Index Fund)
  • Expense ratio: ~0.02%, minimum: none.
• FNILX (Fidelity ZERO Large Cap Index)
  • Expense ratio: 0.00%, minimum: none.

• FXAIX (Fidelity 500 Index Fund)
  • Expense ratio: ~0.015%, minimum: none.

The best fund for you depends on your balance between cost, accessibility, and brand familiarity.

2. Popular ETF Alternatives

If you prefer intraday trading or ETF flexibility, check out:

• VOO (Vanguard S&P 500 ETF)
  • Expense ratio ~0.03%, huge AUM, top choice for passive investors.
• IVV (iShares Core S&P 500 ETF)
  • Similar low-cost structure, direct competitor to VOO.
• SPY (SPDR S&P 500 ETF Trust)
  • Oldest and most liquid; expense ~0.0945%; favorite for traders despite higher cost.

3. Broader Market Funds

For broader exposure beyond large caps:

• VTI (Vanguard Total Stock Market ETF)
  • Covers >3,600 U.S. stocks across all sizes. Excellent diversification.
• Total Market Index Funds
  • Provide broader coverage, including large-, mid-, and small-cap stocks, potentially higher long-term returns, with slightly more volatility than S&P 500 funds.

4. ETF Series for Diversification (Kiplinger’s Picks)

Kiplinger’s ETF 20 list highlights low-cost, diversified ETFs for building a core portfolio:

• Broad-market: IVV (S&P 500), IJH (mid-cap), IJR (small-cap), VXUS (international)
• Dividend-focused: VIG, CGDV
• Sector plays: XLV (healthcare), XLK (technology), IEMG (emerging markets)
• Fixed income: FBND, BSCQ, HYS

5. Growth-Oriented ETFs

Investors seeking high-growth exposure can consider:

• QQQ (Invesco QQQ ETF) – Nasdaq-100, impressive 10-yr return (~19.6%).
• IVW (iShares S&P 500 Growth ETF) – Growth stocks, ~8.3% annualized return.
• VUG (Vanguard Growth ETF) – Low-cost, large-cap growth, ~17.3% return.
• LIT (Global X Lithium & Battery Tech ETF) – EV battery niche; high growth, high volatility.
• SLYG (SPDR S&P 600 Small Cap Growth ETF) – Small-cap growth; ~12.5% annual return.
• IHDG (WisdomTree International Hedged Quality Dividend Growth) – ~2.6% yield; ~9.3% 5-yr return; currency-hedged.

6. Avoiding Index Concentration Risk

Investors concerned about mega-tech concentration in the S&P 500 can explore alternatives like:

• RWL (Invesco S&P 500 Revenue ETF)
  • Weights constituents by revenue, not market cap; more balanced sector exposure; outperformed SPY in downturns.

7. Notable Awards & Recognitions

• NASDX (Shelton Nasdaq-100 Index Fund)
  • Earned a spot in Investors Business Daily’s “Best Index Funds for 2025”; 10-year annualized return ~17.8%.

S&P 500 vs. Total Market: Quick Comparison

Feature	S&P 500 Funds	Total Market Funds
Diversification	Large-cap only	Broad market (all caps)
Volatility	Lower	Slightly higher
Growth potential	Strong	Slight edge due to small/mid caps
Ease of use	Extremely popular	More comprehensive exposure

Final Thoughts: What to Pick in September 2025

• For core holdings:
  • Choose FNILX, SWPPX, FXAIX, or VFIAX for low cost and diversification. ETFs like VOO or IVV offer flexibility with similar benefits.
• For broader coverage:
  • VTI or total market funds add exposure to small and mid-cap stocks.
• For active growth strategies:
  • QQQ, VUG, IVW, LIT, SLYG, or IHDG offer targeted exposure to high-growth sectors.
• For downside protection:
  • RWL may reduce sector concentration risk during market stress.
• For expert-recognized options:
  • NASDX stands out for recognition and long-term performance.

1. Choose Your Investment Platform

Start by selecting a brokerage or investment app that offers index funds. Popular platforms in the U.S. include Vanguard, Fidelity, Charles Schwab, and Robinhood. Look for platforms with low fees and easy access to index funds or ETFs.

2. Select the Right Index Fund

Decide which index you want to track. Common options:

• • S&P 500 Funds – For large-cap U.S. stocks

• Total Market Funds – For broad market exposure
• International Index Funds – For global diversification

Compare expense ratios, minimum investment requirements, and past performance before choosing.

3. Open and Fund Your Account

Once you’ve chosen a platform and a fund:

• Open an account (brokerage or retirement account like IRA or 401(k))
• Deposit money using a bank transfer or direct deposit

4. Decide How Much to Invest

Determine your budget and investment strategy. Many investors start small and use dollar-cost averaging, investing a fixed amount regularly to reduce volatility risk.

5. Buy the Index Fund

On your platform:

• Search for the fund ticker (e.g., VFIAX, FXAIX, VOO, SWPPX)
• Place your order as you would for a stock or ETF

6. Reinvest Dividends

Most index funds pay dividends. Opt for automatic reinvestment to maximize compounding over time.

7. Stay Consistent and Patient

Index fund investing is a long-term strategy. Avoid frequent trading. Review your portfolio periodically and stay invested through market ups and downs for the best results.

Smart Investment Habits for Index Fund Investors

• Use dollar-cost averaging to smooth market volatility.
• Reinvest dividends to maximize compounding.
• Avoid over-diversifying with multiple similar S&P 500 funds—focus on broader coverage if diversification is your aim.
• Keep costs low—tiny differences in expense ratios add up over decades.

Summary

In September 2025, the best U.S. index funds for most investors boil down to cost efficiency, diversification, and personal goals:

• S&P 500 core: FNILX, SWPPX, FXAIX, VFIAX, VOO, or IVV
• Total U.S. market: VTI
• Growth exposure: QQQ, VUG, IVW, LIT, SLYG, IHDG
• Portfolio balance: RWL, NASDX

Sticking with low-cost, broad-market index funds, investing consistently, and staying disciplined remain timeless strategies for building wealth.