Top 5 Index Funds to Buy for Long-Term Growth

Top 5 Index Funds to Buy for Long-Term Growth

Top 5 Index Funds to Buy for Long-Term Growth

Starting your investing journey can feel like standing at the base of a mountain. I remember staring at my first brokerage account back in 2012, unsure whether to buy a few hot stocks or to look for something safer. Over the years, living and investing in the U.S., I've learned firsthand that slow, steady, and diversified wins the race. And nothing embodies that philosophy better than index funds.

Why Index Funds Are the Smart Investor's Choice

According to the S&P Indices Versus Active (SPIVA) Scorecard, more than 80% of active fund managers fail to beat their benchmarks over a 10-year period. That's a sobering statistic. It’s why so many seasoned investors, including Warren Buffett, recommend low-cost index funds as the foundation of any strong portfolio.

Key advantages of index funds include:

  • Diversification: A single purchase gives you exposure to hundreds or thousands of companies.
  • Low fees: Expense ratios typically below 0.10%.
  • Transparency: You know exactly what you're investing in.
  • Consistent returns: Tracking broad market indices delivers reliable growth over time.

Top 5 Index Funds for Long-Term Growth

1. Vanguard 500 Index Fund (VFIAX)

Expense Ratio: 0.04%
Minimum Investment: $3,000

Tracking the S&P 500, VFIAX gives you exposure to 500 of the largest U.S. companies. When I first bought into VFIAX in 2013, I didn't know much — but simply staying invested allowed my initial $5,000 to grow to over $13,500 by 2023, even accounting for the market dips.

Why it works:

  • Includes household names like Apple, Amazon, and Microsoft.
  • Market-cap weighted — your money flows proportionally into stronger performers.
  • Perfect for core portfolio holdings.

2. Fidelity ZERO Total Market Index Fund (FZROX)

Expense Ratio: 0.00%
Minimum Investment: None

Imagine keeping every cent you earn. That's the idea behind FZROX. It's a total U.S. stock market fund that charges no management fees. I opened a second Roth IRA with Fidelity just because of FZROX's offer — and it's been a smooth, consistent grower.

Best features:

  • Broad diversification across large-, mid-, small-, and micro-cap stocks.
  • No investment minimums make it ideal for beginners.
  • Fee savings add up dramatically over decades.

3. Schwab U.S. Broad Market ETF (SCHB)

Expense Ratio: 0.03%
Minimum Investment: Price of 1 share (~$50 as of 2025)

SCHB holds over 2,500 companies, covering virtually the entire investable U.S. equity market. If you want ultra-wide exposure without complexity, this ETF is hard to beat. I use SCHB in my taxable brokerage account to complement my 401(k) holdings.

Highlights:

  • Super low cost.
  • Eligible for commission-free trades at Charles Schwab.
  • Highly tax-efficient structure.

4. Vanguard Total International Stock Index Fund (VTIAX)

Expense Ratio: 0.11%
Minimum Investment: $3,000

U.S. markets won't always outperform. VTIAX opens your portfolio to opportunities across Europe, Asia, and emerging markets. I've used VTIAX to diversify beyond U.S. stocks — and it’s been crucial during years when foreign markets surged ahead.

Benefits:

  • Exposure to over 7,000 companies globally.
  • Balances currency and geopolitical risks.
  • Provides true global diversification.

5. iShares Core S&P Small-Cap ETF (IJR)

Expense Ratio: 0.06%
Minimum Investment: Price of 1 share (~$110 as of 2025)

Small-cap stocks are often the birthplace of future giants. I added IJR to my portfolio in 2017 after seeing its 20-year outperformance versus the S&P 500. Small caps are volatile, but over the long term, the growth potential can be huge.

Top features:

  • Focused on U.S. small-cap companies with strong fundamentals.
  • Ideal for adding growth spice to a balanced portfolio.
  • Historically higher returns over long investment horizons.

Common Questions (FAQ)

What happens if I invest $100 monthly into index funds?

Using simple math, investing $100 monthly with a conservative 7% annual return could grow to about $12,000 in 7 years and nearly $40,000 in 20 years. Thanks to compound interest, starting early makes a huge difference.

Are index funds safe during a recession?

No investment is completely safe. However, index funds tend to recover well over time because they represent the broader market. Dollar-cost averaging through a recession can actually boost your long-term gains.

Can I lose money in index funds?

Short-term losses are possible during market downturns. Historically, however, major indices like the S&P 500 have always recovered and grown over long periods. Staying invested is key.

Pro Tips for Successful Index Fund Investing

  • Automate: Set up automatic contributions so you consistently invest, regardless of market conditions.
  • Rebalance annually: Adjust your allocations back to your target mix to control risk.
  • Think decades, not days: The stock market rewards patience, not panic.
  • Ignore the noise: Market crashes, political chaos — stay the course.

Final Thoughts

Building wealth isn't about hitting home runs; it's about consistency. If you stick to high-quality index funds like VFIAX, FZROX, SCHB, VTIAX, and IJR, automate your contributions, and stay invested through thick and thin, you're setting yourself up for a future where money works for you — not the other way around.

Start small if you have to. Stay consistent. And always remember: Time in the market beats timing the market. Always has, always will.

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