What Are the Best Index Funds?


Quick Answer

All indexes have different advantages and disadvantages for investors, and as such, there is no overall best index fund, as each index can only be rated according to the specific criteria the investor wants fulfilled. The Russell 2000 index, for example, is best suited to investors that want to focus on smaller stocks, while the S&P 500 is extremely diverse, according to Forbes.

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Full Answer

The Nasdaq index is primarily focused on technology, and it does have some common ground with the S&P 500. Investors looking to trade in technology stocks are primarily interested in this index, although it can be more unpredictable than the S&P 500.

The Wilshire 5000 is a large, all-encompassing index that contains a multitude of stocks from most other major United States indexes, including the Nasdaq and the New York Stock Exchange. Some investors favor this index, due to the fact that larger, more wide reaching stock investments often create large returns.

The Dow Jones is perhaps one of the most well known indexes, although it remains smaller than many of the others. The Dow mainly contains blue chip companies, including a large amount of well known global corporations, as stated by Forbes. While the amount of stocks on offer is lower, the Dow has a high level of overall quality, with market movements often key to the U.S economy as a whole.

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