What Is the Vanguard 500 Index Fund?


Quick Answer

The Vanguard 500 Index Fund is an index fund that invests in the 500 largest companies in the United States, and it gives individual investors access to the diverse U.S. equity market. Three-fourths of the U.S. stock market value is in these companies, according to Vanguard.

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Full Answer

The biggest risk that investors face with the Vanguard 500 Index Fund is in relation to the volatility of the stock market itself, says Vanguard. Full exposure to the stock market, with all of its diversity, means going through the ups and downs of the market. However, it is a low-cost option for individual investors to invest in a widely diversified, large-capitalization market.

The 500 Index Fund is in the asset class of general domestic stock. It is under the category of large blend and has a 0.17 percent expense ratio as of April 28, 2015. The minimum investment is $3,000, and the risk potential is rated as a four out of five. Vanguard Equity Investment Group is the fund adviser of this core equity holder. Although there are no purchase, redemption or 12b-1 fees, there are account service fees. These annual fees are charged for each fund held by the investor and vary depending on the type of account being serviced, according to Vanguard.

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