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How and Why to Invest with Index Funds

Index funds enable you to diversify your investment - not put all your eggs in one basket or stock, with one purchase. 



A stock market index offers broad exposure to a wide range of companies with one investment at a low cost.   



The value of a hypothetical basket of stocks that reflects the performance of a certain segment of the market. 

In the United States, the three most popular indices are: the S&P 500, NASDAQ, and the Dow (Dow Jones Industrial Average).


As it is not possible to invest directly in an index, index funds were created to mirror the different indexes. Each fund’s performance is judged relative to its index or Benchmark.


The easiest choice is a “total stock market” index fund.  This type of index offers exposure to companies of all sizes across different industries.  

Alternatively, you may choose a fund that compliments your existing investments or choose a fund that matches your interest, such as: 

  • Sustainability 

  • Social impact  

  • U.S. companies

  • International companies

  • Technology or other industries

  • Big established companies or smaller growth companies


When comparing funds, consider:

  • Management Fee

  • Performance over time (10, 5 and 3 years)

  • Reputable issuer / fund family (such as Vanguard, Blackrock and Fidelity)  

A short list of total stock market and other index funds follows to help you get started. Simply click on the Symbol to see detailed information for each fund.



To remain focused solely on your best interest, we do not endorse or recommend individual funds,  stocks or other investments. This list is not inclusive and is provided for your convenience only.

Vanguard Total Stock Market ETF

Symbol: VTI

Expense: 0.04%

Benchmark/Focus: Entire domestic stock market, blue chips, mid- and small-cap equities

Holdings: 22% technology, 15% financial, 14% healthcare, 11% Industrials

Schwab Total Stock Market Index

Symbol: SWTSX

Expense: 0.05%

Benchmark/Focus: Dow Jones U.S. Total Stock Market Index

Holdings:70% large-cap (technology, financials, healthcare, consumer, industrials)

iShares Core S&P Total U.S. Stock Market

Symbol: ITOT

Expense: 0.03%

Focus /Benchmark: Total U.S. stock market 

Holdings: 3,000 stocks representing ~90% of companies traded on U.S. stock exchanges


Vanguard S&P 500

Symbol: VOO

Expense: 0.04%

Benchmark/Focus: S&P 500 Index

Holdings: Large-cap companies



Symbol: SPY

Expense: 0.09%

Benchmark/Focus: S&P 500

Holdings: Large companies, such as Apple(APPL), JP Morgan Chase & Co. (JPM), Exxon Mobil Corp.(XOM)


iShares Russell 3000 Index Fund

Symbol: IWV

Expense: 0.20%

Benchmark/Focus: The Russell 3000 Index

Holdings: 75% of large-cap companies


Schwab U.S. Large-Cap Growth ETF

Symbol: SCHG

Expense: 0.04%

Benchmark/Focus: Growth Stocks

Holdings: Growth stocks doesn’t mean small companies, it refers to companies with faster revenue and profit expansion than their peers, such as (AMZN) and Facebook (FB).


Vanguard Small Cap ETF

Symbol: VB

Expense: 0.05%

Benchmark/Focus: Small-cap companies (<$4 billion in market capitalization)

Holdings: Smaller banks, retailers, like Burlington Stores Inc. (BURL) and utilities, like NRG Energy Inc. (NRG)


Vanguard Total International Stock Market

Symbol: VXUS

Expense: 0.09%

Benchmark/Focus: FTSE Global All Cap ex US Index

Holdings: 6,000 stocks of companies in developed and emerging markets outside the U.S.


Vanguard FTSE Developed Markets

Symbol: VEA  

Expense: 0.07%

Benchmark/Focus: International companies in developed markets only


This content of this post is provided for educational purposes only. It is not and shall not be construed to be investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.



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