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November 23, 2022 at 11:54 AM
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Index funds have exploded in popularity. Investors are pulling money out of actively managed U.S. stock index funds and putting it into their passive counterparts, Susan Dziubinski, director of content at Morningstar, recently wrote in a blog post.
Index funds that focus on international stocks and bonds are becoming more popular as well, Dziubinski wrote.
She noted the argument of many observers that buying and holding the broad market — whatever that market may be — generates better results than trying to beat that same market through actively selecting securities.
And indeed, Morningstar research has confirmed that in many investment categories, index funds have outperformed active funds over time.
In her blog post, Dziubinski listed mutual funds and ETFs that land in one of the broad U.S. stock Morningstar categories and earn its analysts’ top rating of Gold as of November.
Although the list comprises the best broad-based index funds investing in U.S. stocks, some variety exists among them. Several track the S&P 500 and so provide access to large-cap stocks representing about 80% of the U.S. stock market.
Others follow much broader market indexes that include more stocks, some of which are smaller-cap names. Still other funds on the list are more narrowly focused, tracking indexes based on market capitalization or investment style.
See the gallery for an alphabetical list of the best U.S. stock index funds in which to invest now, according to Morningstar. Year-to-date returns are from Morningstar as of Nov. 18; assets under management are as of Nov. 21.
(Images: Chris Nicholls/ALM)
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