Low Cost S & P 500 Index Funds

USAA S&P 500 Index Fund – Member (USSPX)

The diversified no load mutual fund strategy of the USAA S&P 500 Index Fund (USSPX)

According to its prospectus filing on the U.S. Securities and Exchange Commission EDGAR system, the investment strategy of the USAA S&P 500 Index Member Shares mutual fund targets investment results corresponding to the S&P 500 index. Investments are allocated using about the same weightings as those of the companies that comprise the Standard and Poors 500 composite index.

This USAA S&P 500 no load index fund is one of the lowest cost S&P 500 index funds. For a listing of ten such low cost index mutual funds see the section below.

Note that only USAA members may invest in the USSPX index mutual fund. The USAA is a member owned organization and is not a publicly traded company. Those eligible to join the USAA are: 1) active-duty U.S. military officers and enlisted personnel, 2) US state national guard and selected reserve officers and enlisted personnel, 3) recently retired or separated military personnel, and 4) the children of USAA members. At the end of 2006, the USAA had 5.9 million members.

Overview of the USAA S&P 500 Index Fund

This low cost index fund’s annual management expense ratio is .18%. There are not sales load charges and no 12b-1 fees, when you purchase shares directly from USAA. Annual turnover is a very low 4%.

Total net assets are about $3.2 billion. Shares in this fund were first sold in 1996. The trading symbol is USSPX for Member Shares. A minimum initial deposit of $3,000 is required to open a taxable account.

The USAA fund family website can be found at www.usaa.com. The USAA customer service telephone number is 1-800-531-8722.

This no load index fund is one of the lower cost S&P 500 equity mutual funds that investors can buy.

To buy index funds, click on any of the 10 low cost, no load S&P 500 index funds below to find additional information about them. The article “Top 10 S&P 500 Index Funds” explains how this list was developed. The five letter term in parentheses is the fund’s trading symbol.

  1. California Investment S&P 500 Index Fund (SPFIX)
  2. Fidelity Spartan 500 Index Fund (FSMKX)
  3. Schwab S & P 500 Index Fund (SWPPX)
  4. SSga S&P 500 Index Fund (SVSPX)
  5. T Rowe Price Equity Index Fund 500 (PREIX)
  6. United Association S&P500 Index Fund (UAIIX)
  7. USAA S&P 500 Index Fund – Member (USSPX)
  8. Vanguard 500 Index Fund – Admiral (VFIAX)
  9. Vanguard 500 Index Fund (VFINX)
  10. Vantagepoint 500 Index Fund – Stock II (VPSKX)

You should be able to go directly to most of these 10 funds to buy them. Either call them or download the investment forms from their websites. When you shop for any investment, always pay attention to the details. Understand whether there are other restrictions, costs, and purchase conditions associated with buying any index mutual fund.

Your decision on whether to purchase or to sell any investment is yours and yours alone. READ OUR WEBSITE DISCLAIMER HERE: No Load Index Funds

Vanguard 500 Index Fund – Admiral (VFIAX)

Overview of the Vanguard 500 Index Fund

According to Vanguard’s website, the investment strategy of the Vanguard 500 Index mutual fund is to use a passive management or index “investment approach designed to track the performance of the Standard & Poor’s 500 Index, a widely recognized benchmark of U.S. stock market performance that is dominated by the stocks of large U.S. companies. The fund attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index.”

This Vanguard index fund is a no load mutual fund. It can be purchased directly from Vanguard without the added sales fees of a financial advisor or investment counselor. This fund also does not charge an annual 12b-1 fee.

Annual portfolio turnover is only about 5%. Turnover is a reasonable proxy for the transactions costs that a fund incurs, and lower turnover means lower trading costs. Admiral shares account for about $37 billion of the total of about $123 billion is assets in the Vanguard 500 Index Fund. This Vanguard fund is THE giant S&P 500 index fund among other smaller index fund giants. Founded in 1976, this fund is also the longest surviving S&P 500 index fund in the industry.

The dominant issue in choosing among passively managed index mutual funds benchmarked against the S&P 500 is cost.

Securities industry management and trading fees are all over the map from reasonably low to shockingly high. Vanguard Admiral Shares are not for the individual investor with limited funds, because this share class requires an initial investment of $100,000 to get a rock-bottom annual expense ratio of .09%. For those who are starting their investment program or those who currently have more modest means, shares in the Vanguard 500 Index Fund (VFINX) are an alternative. VFINX shares have a low annual expense ratio of .18% and a minimum initial deposit requirement of $3,000 in a taxable account.

Alternatively, an investor might choose one of the other low cost, no load index funds listed in the section below. Nevertheless, you should not be daunted by the $100,000 investment requirement. With a regular monthly investment program, over time your assets could grow until you qualify for the lower expense ratio of VFIAX Admiral Shares. Furthermore, if you already have assets in Vanguard accounts that you have held for at least 10 years, then $50,000 is the minimum conversion limit into VFIAX shares.

You can find the Vanguard Group fund family website at www.vanguard.com. Vanguard’s customer service telephone number is 1-800-662-2739.

10 of the lowest cost S&P 500 Index Funds that individual investors can buy directly.

To buy index funds, click on any of the 10 low cost, no load S&P 500 index funds below to find additional information about them. The article “Top 10 S&P 500 Index Funds” explains how this list was developed. The five letter term in parentheses is the fund’s trading symbol.

  1. California Investment S&P 500 Index Fund (SPFIX)
  2. Fidelity Spartan 500 Index Fund (FSMKX)
  3. Schwab S & P 500 Index Fund (SWPPX)
  4. SSga S&P 500 Index Fund (SVSPX)
  5. T Rowe Price Equity Index Fund 500 (PREIX)
  6. United Association S&P500 Index Fund (UAIIX)
  7. USAA S&P 500 Index Fund – Member (USSPX)
  8. Vanguard 500 Index Fund – Admiral (VFIAX)
  9. Vanguard 500 Index Fund (VFINX)
  10. Vantagepoint 500 Index Fund – Stock II (VPSKX)

You should be able to go directly to most of these 10 funds to buy them. Either call them or download the investment forms from their websites. When you shop for any investment, always pay attention to the details. Understand whether there are other restrictions, costs, and purchase conditions associated with buying any index mutual fund.

Your decision on whether to purchase or to sell any investment is yours and yours alone. READ OUR WEBSITE DISCLAIMER HERE: No Load Index Funds

Vantagepoint 500 Index Fund (VPSKX)

The diversified no load index fund strategy of the Vantagepoint 500 index mutual fund

According to Vantagepoint’s prospectus, the investment strategy of the Vantagepoint 500 Stock Index mutual fund “to offer long-term capital growth by approximating the performance of the S&P 500 Index. The fund’s principal investment strategies are “to seek to invest, under normal circumstances, at least 90% of its net assets in a portfolio that consists of the stocks in the S&P 500 Index, weighted to seek to replicate the investment characteristics and performance of the index.”

Understand the differences between Vantagepoint 500 Index Fund Class I and Class II shares.

To participate in this low cost mutual fund, you must be eligible to participate in an employer-sponsored retirement savings plan that offers VPSKX Class II Shares as an investment alternative. Such employer plans might include A) 457 deferred compensation plans, B) 401(a) defined contribution plans, C) 401(k) salary reduction plans, D) 403b non-profit employer plans, or other similar plans.

To obtain the .25% annual expense ratio associated with Class II Shares, your employer-sponsored plan must have $20 million or more of your group’s employee assets under administration by the Vantagepoint Funds sponsor. If you plan’s total assets under administration by the sponsor are under $20 million, then only Class I Shares would be available, which carry a higher annual expense ratio of .45%. The trading symbol or ticker symbol for Class I Shares is VPFIX.

Individuals can also invest directly with Vantagepoint Funds in a traditional IRA account or a Roth IRA account. However, only Class I Shares (VPFIX) are available, which carry the .45% annual management fee. While Class II Shares carry a relatively low expense ratio for an index fund tracking the S&P500 composite index, the higher VPFIX Class I Shares expense ratio might induce a direct IRA investor to look elsewhere for a lower cost passively managed index investment fund.

Short overview of Vantagepoint 500 Index Fund — Class II Shares (VPSKX)

Annual management expense fees are .25% for Class II shares. The fund itself does not charge sales loads or 12b-1 fees, but you should check for additional fees the may be levied by the particular plan within which VPSKX shares are offered as an option. These additional fees would be related to the plan and not this particular investment fund share class.

Annual turnover is 4% and acts as a trading cost proxy for the fund. Shares in the fund were first sold in 1999 and. Total net assets in the fund are about $413 million. The trading symbol for Class II shares is VPSKX.

The Vantagepoint fund family website is at www.icmarc.org. The customer service telephone number is 1-800-669-7400.

The Vantagepoint 500 Index Fund is one of the lower cost S&P 500 Index Funds you can buy.

To buy index funds, click on any of the 10 low cost, no load S&P 500 index funds below to find additional information about them. The article “Top 10 S&P 500 Index Funds” explains how this list was developed. The five letter term in parentheses is the fund’s trading symbol.

  1. California Investment S&P 500 Index Fund (SPFIX)
  2. Fidelity Spartan 500 Index Fund (FSMKX)
  3. Schwab S & P 500 Index Fund (SWPPX)
  4. SSga S&P 500 Index Fund (SVSPX)
  5. T Rowe Price Equity Index Fund 500 (PREIX)
  6. United Association S&P500 Index Fund (UAIIX)
  7. USAA S&P 500 Index Fund – Member (USSPX)
  8. Vanguard 500 Index Fund – Admiral (VFIAX)
  9. Vanguard 500 Index Fund (VFINX)
  10. Vantagepoint 500 Index Fund – Stock II (VPSKX)

You should be able to go directly to most of these 10 funds to buy them. Either call them or download the investment forms from their websites. When you shop for any investment, always pay attention to the details. Understand whether there are other restrictions, costs, and purchase conditions associated with buying any index mutual fund.

Your decision on whether to purchase or to sell any investment is yours and yours alone. READ OUR WEBSITE DISCLAIMER HERE: No Load Index Funds


Low Cost Index Funds



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