The blockbuster Space Exploration Technologies Inc. (ticker: SPCX) IPO has stirred considerable controversy among index providers.
These firms, including Nasdaq, FTSE Russell, the Center for Research in Security Prices (CRSP), MSCI and S&P Dow Jones Indices, have spent much of the year debating whether SpaceX should receive fast-track admission into some of their flagship benchmarks.
At the center of the debate is a concept known as seasoning, a set of requirements designed to ensure newly public companies establish a sufficient trading history before being added to major indexes. While the exact rules vary by provider, seasoning requirements generally exist to improve liquidity, reduce volatility and allow investors time to evaluate a company’s public-market performance.
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That issue has become increasingly important as private companies stay private longer and eventually debut at unprecedented valuations. SpaceX is a prime example. The company raised $75 billion through the sale of 555 million shares, giving it a market cap of more than $1.7 trillion on its first day of trading.
Several index providers ultimately chose to accelerate their inclusion processes. Notably, Nasdaq revised its methodology in May to allow faster entry for exceptionally large IPOs, provided they would rank among the top 40 holdings of the Nasdaq-100 by market cap.
FTSE Russell adopted a similar approach, permitting eligible companies to enter on the fifth trading day rather than waiting for the next quarterly rebalance. CRSP implemented comparable changes, while MSCI also introduced a fast-entry pathway for sufficiently large IPOs following a 10-day trading period.
The notable holdout was S&P Dow Jones Indices. In early June, the firm announced that it would not modify its methodology. That decision carries significant implications because trillions of dollars in mutual funds and exchange-traded funds, or ETFs, track S&P benchmarks, such as the S&P 500.
Whether S&P’s decision ultimately proves wise remains to be seen, but it highlights an important lesson for investors: The underlying benchmark matters. Beyond fees, investors should also examine how an index is constructed, what rules govern inclusion and exclusion, and how those may change over time.
Here are 10 of the best low-cost index funds to buy in 2026 with an expense ratio of 0.07% or less:
| Fund | Expense Ratio |
| Vanguard Total World Stock ETF (VT) | 0.06% |
| Vanguard S&P 500 ETF (VOO) | 0.03% |
| Vanguard Total Stock Market ETF (VTI) | 0.03% |
| Vanguard Total International Stock ETF (VXUS) | 0.05% |
| State Street SPDR Portfolio S&P 500 ETF (SPYM) | 0.02% |
| State Street SPDR Portfolio S&P 500 Growth ETF (SPYG) | 0.04% |
| State Street SPDR Portfolio S&P 500 Value ETF (SPYV) | 0.04% |
| State Street SPDR Portfolio S&P 500 High Dividend ETF (SPYD) | 0.07% |
| iShares Core S&P Mid-Cap ETF (IJH) | 0.05% |
| iShares Core S&P Small-Cap ETF (IJR) | 0.06% |
Vanguard Total World Stock ETF (VT)
“The returns of the market have been driven by a small percentage of big winners,” says Robert Johnson, professor of finance at Creighton University’s Heider College of Business. “For most, trying to pick winners ex-ante is a loser’s game, so the solution is to invest in diversified index funds.”
VT passively tracks the FTSE Global All Cap Index, a benchmark of over 10,000 U.S., international developed and emerging-market equities. Despite its broad focus, the ETF is affordable, with a 0.06% expense ratio. VT has delivered an annualized 12.8% total return over the trailing 10-year period.
Vanguard S&P 500 ETF (VOO)
“Beating the market is a zero-sum game — it’s impossible for all investors in aggregate to outperform the market, as investors can’t all be above average,” explains Rodney Comegys, chief investment officer at Vanguard Capital Management and head of global equity at Vanguard.
For many investors, the S&P 500 is “the market,” and most actively managed funds continue to lag it long term. Those looking to stack the odds in their favor can obtain exposure at 0.03% in fees via VOO. VOO also recently became the first ETF to surpass $1 trillion in assets under management, or AUM.
Vanguard Total Stock Market ETF (VTI)
“Broad-market index funds use highly efficient investment strategies with minimal portfolio turnover, which means fewer taxable capital gains distributions for investors,” Comegys says. Unlike actively managed funds, index funds do not typically trade in and out of stocks frequently.
Investors can see this mechanic in play with VTI, which despite owning a broad portfolio of over 3,400 stocks has an annual turnover rate of just 2.6%. The ETF charges the same 0.03% expense ratio as VOO does, but is slightly more diversified owing to its inclusion of mid- and small-cap stocks.
Vanguard Total International Stock ETF (VXUS)
“Over time, as markets grew more global and complex, Vanguard’s index teams evolved alongside them, managing hundreds of benchmarks across regions and asset classes,” Comegys says. Indexes can now be used to track international stocks, bonds, commodities, options and even cryptocurrencies.
Investors seeking international diversification may find VXUS a more hands-off alternative to picking individual American depositary receipts. This ETF spans 8,700 market-cap-weighted international developed and emerging-market stocks. VXUS charges a 0.05% expense ratio.
State Street SPDR Portfolio S&P 500 ETF (SPYM)
“At just two basis points, or 0.02%, SPYM is currently the lowest-cost ETF tracking the S&P 500 index,” says Matthew Bartolini, managing director and global head of research strategists at State Street Investment Management. While not as large as VOO, SPYM is still sizable, at $144 billion in AUM.
“With a share price below $100 — versus an average of over $650 for other S&P 500 ETFs — SPYM also lowers the capital required for entry and supports more precise portfolio allocation for retail investors,” Bartolini says. This can be helpful for investors who prefer to avoid the use of fractional shares.
[Read: 5 ETFs That Outperform the S&P 500]
State Street SPDR Portfolio S&P 500 Growth ETF (SPYG)
Investors seeking more refined exposure, such as an overweight to growth stocks, can still find plenty of index fund options. For example, SPYG delivers a growth tilt at a highly affordable 0.04% expense ratio, far below comparable actively managed growth funds. This ETF currently has $53 billion in AUM.
SPYG’s methodology builds on the S&P 500’s base requirements for earnings consistency, liquidity and market cap by also screening for sales growth, price-to-earnings (P/E) change ratio and momentum. Compared to the base S&P 500, SPYG is overweight technology stocks, at over 50% of its portfolio.
State Street SPDR Portfolio S&P 500 Value ETF (SPYV)
SPYV is the polar opposite of SPYG, delivering a value tilt instead of growth. This ETF still builds off the same S&P 500 index, but screens for price-to-book value, P/E and price-to-sales ratios instead. It charges an identical 0.04% expense ratio and currently holds $35 billion in AUM.
Compared to the base S&P 500, SPYV is underweight technology, at 20% of its portfolio. The second largest sector represented in SPYV is financials, followed by healthcare and industrials. The ETF’s holdings trade at an average P/E ratio of 19.1, compared to 26.8 for SPYG.
State Street SPDR Portfolio S&P 500 High Dividend ETF (SPYD)
Many popular index funds build off S&P 500 variants because the benchmark enables a baseline standard for earnings, liquidity and size. This can help investors ensure quality. SPYD is a great example, targeting an equal-weighted portfolio of the 80 highest-yielding dividend stocks in the S&P 500.
This ETF currently pays a 4.3% 30-day SEC yield, significantly higher than what SPYM pays, at 1%. The portfolio also looks dramatically different; real estate is overweighted, at 27%, followed by consumer staples, at 16%. SPYD also delivers good value exposure, with a 13.7 P/E ratio.
iShares Core S&P Mid-Cap ETF (IJH)
Mid-cap stocks, generally defined as companies worth between $2 billion and $10 billion, occupy a middle ground. They are often established enough to avoid some small-cap volatility while still offering meaningful growth potential. Broad market indexes, however, often underweight them.
Investors seeking dedicated mid-cap exposure may find IJH appealing. The fund tracks the S&P MidCap 400 Index for a low 0.05% expense ratio. Compared with the S&P 500, it carries a notable overweight to industrial stocks, which currently account for 26% of the ETF’s assets.
iShares Core S&P Small-Cap ETF (IJR)
Small-cap stocks, typically defined as companies worth less than $2 billion, can offer higher growth potential but also come with greater volatility. The segment contains many unprofitable firms, making index selection particularly important. Quality screens can help mitigate some of these risks.
IJR tracks the S&P SmallCap 600 Index, which is more selective than the Russell 2000 when it comes to profitability requirements. Historically, the S&P SmallCap 600 Index has outperformed the Russell 2000 due to this difference. Despite this, IJR remains inexpensive with a 0.06% expense ratio.
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Update 06/16/26: This story was published at an earlier date and has been updated with new information.
