EXPOSED: 36 Popular Index Mutual Funds That Are More Expensive Than Vanguard's

Jack Bogle

Photo: youtube.com

Indexing is praised by experts as the low-cost, tax-efficient investment strategy that beats the markets more often then not.But when it comes to index funds, some are better than others.

We screened Morningstar for S&P 500 index funds.  We then ranked them based on expense ratio and tax cost ratio; the lower the better.

What we found: NO ONE even comes close to being as low-cost as Vanguard.

The legendary Vanguard 500 Index Admiral and Vanguard 500 Index Signal funds boast incredibly low net expense ratios of 0.05 per cent.  The next best funds based on the same metric were TIAA-CREF’s S&P 500 fund and Fidelity’s Spartan 500 Index fund, which each have net expense ratios of 0.07 per cent.

However, the Admiral and Signal funds are much more tax-efficient with low tax cost ratios of 0.31 per cent each.  TIAA-CREF and Fidelity’s Spartan funds have tax cost ratios of 0.73 per cent and 0.69 per cent, respectively.  The tax cost ratio is how much of your return you lose to taxes.

When it comes to cost, you just can’t beat Vanguard.  Here’s a list of S&P 500 index funds. 

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Photo: Morningstar, Business Insider

More On Indexing
The desire to make money is a powerful one.  However, it causes us to be irrational and leads us to make big mistakes.

One of the biggest mistakes investors make is not paying attention to costs when choosing mutual funds.  Many funds, often “actively managed” funds in which portfolio managers try to pick stocks that beat certain benchmarks like the S&P 500, have very high costs.

Countless studies prove that most actively managed funds do not accomplish the goal of outperforming.  A recent study showed that these funds underperformed 62% of the time over the past 10 years, 67% for the last 15 years, and 72% for the last 20 years.  Some studies show that 97% of actively managed funds underperformed their benchmarks over more extended periods.

GE Instl S&P 500 Index Inv, GIDIX

Total Score: .665
Net Expense Ratio:
.15%

1-Year Tax Cost Ratio:
1.18

1-Year Pretax Return:
4.61

1-Year Tax Adjusted Return:
3.38


Data was collected using Morningstar

BlackRock S&P 500 Index A, MDSRX

Total Score: .565
Net Expense Ratio:
.56%

1-year Pretax Return:
4.14

1-Year Tax Adjusted Return:
3.55

1-Year Tax Cost Ratio:
.57

Data was collected using Morningstar

Legg Mason Batterymarch S&P 500 Index A, SBSPX

Total Score: .565
Net Expense Ratio:
.59%

1-Year Pretax Return:
4.15

1-Year Tax Adjusted Return:
3.59

1-Year Tax Cost Ratio:
.54

Data was collected using Morningstar

MainStay S&P 500 Index A, MSXAX

Total Score: .555
Net Expense Ratio:
.6%

1-Year Pretax Return:
4.19

1-Year Tax Adjusted Return:
3.55

1-Year Tax Cost Ratio:
.51

Data was collected using Morningstar

Invesco S&P 500 Index Y, SPIDX

Total Score: .550
Net Expense Ratio:
.36%

1-Year Pretax Return:
4.35

1-Year Tax Adjusted Return:
3.58

1-Year Tax Cost Ratio:
.74

Data was collected using Morningstar

Nationwide S&P 500 Index Instl Svc, GRISX

Total Score: .525
Net Expense Ratio:
.45%

1-Year Pretax Return:
4.27

1-Year Tax Adjusted Return:
3.65

1-Year Tax Cost Ratio:
.6

Data was collected using Morningstar

DWS S&P 500 Index S, SCPIX

Total Score: .510
Net Expense Ratio:
.39%

1-Year Pretax Return:
4.45

1-Year Tax Adjusted Return:
3.8

1-Year Tax Cost Ratio:
.63

Data was collected using Morningstar

United Association S&P 500 Index II, UAIIX

Total Score: .510
Net Expense Ratio:
.34%

1-Year Pretax Return:
4.54

1-Year Tax Adjusted Return:
3.83

1-Year Tax Cost Ratio:
.68

Data was collected using Morningstar

Principal Large Cap S&P 500 Index R5, PLFPX

Total Score: .505
Net Expense Ratio:
.42%

1-Year Pretax Return:
4.33

1-Year Tax Adjusted Return:
3.72

1-Year Tax Cost Ratio:
.59

Data was collected using Morningstar

SIMT S&P 500 Index A, SSPIX

Total Score: .500
Net Expense Ratio:
.43%

1-Year Pretax Return:
4.36

1-Year Tax Adjusted Return:
3.77

1-Year Tax Cost Ratio:
.57

Data was collected using Morningstar

DWS Equity 500 Index S, BTIEX

Total Score: .495
Net Expense Ratio:
.31%

1-Year Pretax Return:
4.53

1-Year Tax Adjusted Return:
3.82

1-Year Tax Cost Ratio:
.68

Data was collected using Morningstar

RS S&P 500 Index A, GUSPX

Total Score: .495
Net Expense Ratio:
.38%

1-Year Pretax Return:
4.42

1-Year Tax Adjusted Return:
.67

1-Year Tax Cost Ratio:
.61

Data was collected using Morningstar

PNC S&P 500 Index I, PSXIX

Total Score: .490
Net Expense Ratio:
.37%

1-Year Pretax Return:
4.46

1-Year Tax Adjusted Return:
3.8

1-Year Tax Cost Ratio:
.61

Data was collected using Morningstar

Shelton S&P 500 Index Direct, SPFIX

Total Score: .490
Net Expense Ratio:
.36%

1-Year Pretax Return:
4.67

1-Year Tax Adjusted Return:
4.01

1-Year Tax Cost Ratio:
.62

Data was collected using Morningstar

United Association S&P 500 Index I, UASPX

Total Score: .490
Net Expense Ratio:
.28%

1-Year Pretax Return:
4.59

1-Year Tax Adjusted Return:
3.86

1-Year Tax Cost Ratio:
.7

Data was collected using Morningstar

Vantagepoint 500 Stock Index II, VPFIX

Total Score: .490
Net Expense Ratio:
.42%

1-Year Pretax Return:
4.34

1-Year Tax Adjusted Return:
3.76

1-Year Tax Cost Ratio:
.56

Data was collected using Morningstar

BlackRock S&P 500 Index Instl, MASRX

Total Score: .480
Net Expense Ratio:
.3%

1-Year Pretax Return:
4.42

1-Year Tax Adjusted Return:
3.73

1-Year Tax Cost Ratio:
.66

Data was collected using Morningstar

TIAA-CREF S&P 500 Index, TRSPX

Total Score: .480
Net Expense Ratio:
.32%

1-Year Pretax Return:
4.39

1-Year Tax Adjusted Return:
3.72

1-Year Tax Cost Ratio:
.64

Data was collected using Morningstar

State Street Equity 500 Index Svc, STBIX

Total Score: .475
Net Expense Ratio:
.34%

1-Year Pretax Return:
4.36

1-Year Tax Adjusted Return:
3.72

1-Year Tax Cost Ratio:
.61

Data was collected using Morningstar

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DWS Equity 500 Index Inst, BTIIX

Total Score: .470
Net Expense Ratio:
.24%

1-Year Pretax Return:
4.6

1-Year Tax Adjusted Return:
3.86

1-Year Tax Cost Ratio:
.7

Data was collected using Morningstar

MainStay S&P 500 Index I, MSPIX

Total Score: .470
Net Expense Ratio:
.35%

1-Year Pretax Return:
4.45

1-Year Tax Adjusted Return:
3.84

1-Year Tax Cost Ratio:
.59

Data was collected using Morningstar

USAA S&P 500 Index Member, USSPX

Total Score: .455
Net Expense Ratio:
.25%

1-Year Pretax Return:
4.5

1-Year Tax Adjusted Return:
3.81

1-Year Tax Cost Ratio:
.66

Data was collected using Morningstar

Vantagepoint 500 Stock Index II, VPSKX

Total Score: .450
Net Expense Ratio:
.22%

1-Year Pretax Return:
4.56

1-Year Adjusted Return:
3.85

1-Year Tax Cost Ratio:
.68

Data was collected using Morningstar

State Street Equity 500 Index Adm, STFAX

Total Score: .445
Net Expense Ratio:
.24%

1-Year Pretax Return:
4.55

1-Year Tax Adjusted Return:
3.88

1-Year Tax Cost Ratio:
.65

Data was collected using Morningstar

SIMT S&P 500 Index E, TRQIX

Total Score: .435
Net Expense Ratio:
.25%

1-Year Pretax Return:
4.56

1-Year Tax Adjusted Return:
3.92

1-Year Tax Cost Ratio:
.62

Data was collected using Morningstar

American Beacon S&P 500 Idx Instl, AASPX

Total Score: .435
Net Expense Ratio:
.16%

1-Year Pretax Return:
4.65

1-Year Tax Adjusted Return:
3.90

1-Year Tax Cost Ratio:
.71

Data was collected using Morningstar

Nationwide S&P 500 Index Instl, GRMIX

Total Score: .43
Net Expense Ratio:
.2%

1-Year Pretax Return:
4.56

1-Year Tax Adjusted Return:
3.86

1-Year Tax Cost Ratio:
.66

Data was collected using Morningstar

Principal Large Cap S&P 500 Index Inst, PLFIX

Total Score: .43
Net Expense Ratio:
.17%

1-Year Pretax Return:
4.56

1-Year Tax Adjusted Return:
3.84

1-Year Tax Cost Ratio:
.69

Data was collected using Morningstar

SSgA S&P 500 Index Instl, SVSPX

Total Score: .430
Net Expense Ratio:
.18%

1-Year Pretax Return:
4.8

1-Year Tax Adjusted Return:
4.08

1-Year Tax Cost Ratio:
.68

Data was collected using Morningstar

Dreyfus S&P 500 Index, PEOPX

Total Score: .430
Net Expense Ratio:
.5%

1-Year Pretax Return:
4.26

1-Year Tax Adjusted Return:
3.88

1-Year Tax Cost Ratio:
.36

Data was collected using Morningstar

BlackRock S&P 500 Stock, WFSPX

Total Score: .425
Net Expense Ratio:
.18%

1-Year Pretax Return:
4.62

1-Year Tax Adjusted Return:
3.92

1-Year Tax Cost Ratio:
.67

Data was collected using Morningstar

USAA S&P 500 Index Reward, USPRX

Total Score: .415
Net Expense Ratio:
.13%

1-Year Pretax Return:
4.62

1-Year Tax Adjusted Return:
3.89

1-Year Tax Cost Ratio:
.7

Data was collected using Morningstar

Schwab S&P 500 Index, SWPPX

Total Score: .400
Net Expense Ratio:
.09%

1-Year Pretax Return:
4.75

1-Year Tax Adjusted Return:
4

1-Year Tax Cost Ratio:
.71

Data was collected using Morningstar

TIAA-CREF S&P 500 Index Instl, TISPX

Total Score: .400
Net Expense Ratio:
.07%

1-Year Pretax Return:
4.7

1-Year Tax Adjusted Return:
3.94

1-Year Tax Cost Ratio:
.73

Data was collected using Morningstar

Fidelity Spartan 500 Index Inv, FUSEX

Total Score: .390
Net Expense Ratio:
.1%

1-Year Pretax Return:
4.66

1-Year Tax Adjusted Return:
3.96

1-Year Tax Cost Ratio:
.68

Data was collected using Morningstar

Fidelity Spartan 500 Index Advtg, FUSVX

Total Score: .380
Net Expense Ratio:
.07%

1-Year Pretax Return:
4.69

1-Year Tax Adjusted Return:
3.98

1-Year Tax Cost Ratio:
.69

Data was collected using Morningstar

GE Inst S&P 500 Index Svc, GIDSX

Total Score: .315
Net Expense Ratio:
.36%

1-Year Pretax Return:
4.28

1-Year Tax Adjusted Return:
3.99

1-Year Tax Cost Ratio:
.27

Data was collected using Morningstar

Dreyfus Basic S&P 500 Stock Index, DSPIX

Total Score: .245
Net Expense Ratio:
.2%

1-Year Pretax Return:
4.62

1-Year Tax Adjusted Return:
4.32

1-Year Tax Cost Ratio:
.29

Data was collected using Morningstar

Vanguard 500 Index Admiral, VFIAX

Total Score: .180
Net Expense Ratio:
.05%

1-Year Pretax Return:
4.73

1-Year Tax Adjusted Return:
4.4

1-Year Tax Cost Ratio:
.31

Data was collected using Morningstar

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