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The 5 Best Index Funds for Optimists

If you’re bullish on the future, follow Warren Buffett’s simple advice

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Best Index Funds #1: Vanguard S&P 500 ETF (VOO)

warren-buffett-best-index-funds-vanguard-voo1-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.

Because VOO just reflects the S&P 500, top holdings are the same, too. That puts Apple (AAPL), Exxon Mobil (XOM), Google (GOOG), Microsoft (MSFT) and Johnson & Johnson (JNJ) at the top.

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.

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