Best Index Funds #4: iShares Russell 2000 Index ETF (IWM)
1-Year Performance: 26.5%
5-Year Performance: 25.7% (annualized)
Expense Ratio: 0.25%
If you want to be a bit more aggressive with your selections (and I do), then one of the best index funds to own is the iShares Russell 2000 Index ETF (IWM).
The IWM is a proxy for the small-cap segment of the U.S. equity market — a segment that tends to be more volatile than its large-cap brethren; however, these stocks also tend to provide bigger gains during bullish times. And, if you have a very long, Warren Buffett-style time horizon, you most likely can weather the occasional bear slumps.