Best Index Funds #1: Vanguard S&P 500 ETF (VOO)
1-Year Performance: 20.3%
3-Year Performance: 14.84% (annualized)
Expense Ratio: 0.05%
If you want to follow Warren Buffett’s recommendations, then 90% of your money should be in the Vanguard S&P 500 ETF (VOO). This exchange-traded fund is designed to mirror the performance of the S&P 500 Index, so if you are long-term bullish on the broad measure of the large-cap, domestic equity market, then one of the best index funds you can own is VOO.
And at an expense ratio of just 0.05%, you also fulfill the Warren Buffett criteria of “low cost.” It doesn’t get much lower than that — period.