A mutual fund pools your money with thousands of other investors and spreads it across many stocks or bonds. The best ones are simple, cheap, and built for the long run.
Index mutual funds have taken over the category because they consistently beat most active funds after fees. Here are five of the strongest options for long-term growth in 2026.
Our Top Picks
These funds come from major issuers like Vanguard, Fidelity, and Schwab. They are not Firstcard partners, but you can hold many of them through a brokerage account. Public is one option that supports a wide range of funds, ETFs, and stocks, and you can open a Public account here to get started.
1. VFIAX (Vanguard 500 Index Fund Admiral Shares)
VFIAX tracks the S&P 500, the same large-cap index used by VOO and SPY.
- Expense ratio: 0.04 percent
- Standout feature: Vanguard's legendary low-cost structure with daily NAV pricing
- Best for: A simple core holding inside a Vanguard account
VFIAX is the mutual fund version of VOO. If you prefer to set up automatic monthly investments in fixed dollar amounts, mutual funds make that easier than ETFs.
2. VTSAX (Vanguard Total Stock Market Index Fund Admiral Shares)
VTSAX holds nearly every publicly traded U.S. stock, from giants down to small caps.
- Expense ratio: 0.04 percent
- Standout feature: Maximum U.S. diversification in one fund
- Best for: One-fund investors who want everything
VTSAX is one of the most popular index funds in the world. It is the same idea as VTI, just delivered as a mutual fund. The broad coverage means you never miss the next big winner.
3. FXAIX (Fidelity 500 Index Fund)
FXAIX tracks the S&P 500 and is famous for its tiny expense ratio.
- Expense ratio: 0.015 percent
- Standout feature: Among the cheapest S&P 500 funds available anywhere
- Best for: Fidelity account holders building a long-term core
FXAIX has the same holdings as VFIAX, but at an even lower cost. Fidelity also offers no account minimums, which makes it easy to start small.
4. FZROX (Fidelity ZERO Total Market Index Fund)
FZROX is one of the few mutual funds in the world with a zero expense ratio.
- Expense ratio: 0.00 percent
- Standout feature: No annual fund fee at all
- Best for: Fidelity customers in tax-advantaged accounts
FZROX tracks a Fidelity-built index covering nearly the entire U.S. market. The catch is that it is only available at Fidelity and is not portable to other brokers. For long-term holdings inside a Roth IRA or 401(k) rollover, it is hard to beat free.
5. SWPPX (Schwab S&P 500 Index Fund)
SWPPX is Schwab's answer to VFIAX and FXAIX, tracking the same S&P 500 index.
- Expense ratio: 0.02 percent
- Standout feature: No minimum investment requirement
- Best for: Schwab customers who want simple, low-cost exposure
Schwab has been aggressive on pricing, and SWPPX is a great deal. You can buy it inside any Schwab brokerage or retirement account with no minimum dollar amount.
Public
Public
Investing for those who take it seriously. Invest in stocks, bonds, options, crypto & more.
Standout feature
A 5%+ yield Bond Account paired with 3.3% APY on cash — Public is one of the only consumer apps where idle and conservative money is treated as seriously as the equity portfolio.
Fees
Free
Pros
• Invest in stocks, bonds, crypto & more• Earn 3.3% APY* on your cash with no fees• 1% match when you transfer your portfolio• Lock in a 5%+ yield with a Bond Account
Cons
Customer support is in-app and email only, no phone
How Mutual Funds Differ From ETFs
Both mutual funds and ETFs hold many stocks or bonds, but they trade differently. Mutual funds price once per day at market close, while ETFs trade like stocks all day long.
Mutual funds shine for automatic monthly investing in exact dollar amounts. ETFs win on tax efficiency in taxable accounts. For retirement accounts, the difference rarely matters.
Most of the funds above also have ETF cousins. VFIAX is the same idea as VOO, VTSAX matches VTI, and so on.
What Makes a Mutual Fund Worth Owning?
A few qualities separate strong long-term funds from the rest. Look for:
- An expense ratio under 0.10 percent for broad index funds.
- A long track record, ideally more than ten years.
- Billions in assets under management for stability.
- No sales load or 12b-1 fee.
- A clear, rules-based strategy you can understand.
If a fund looks complex or charges over 0.75 percent, walk away. There is almost always a cheaper option doing the same job.
How to Pick Between These Funds
The choice often comes down to which brokerage you use. VFIAX and VTSAX live at Vanguard. FXAIX and FZROX live at Fidelity. SWPPX lives at Schwab.
If you use Public or another broker, you may be limited to ETF versions instead, which is fine. The underlying exposure is what really matters, not the wrapper.
Decide whether you want total U.S. market coverage or just the S&P 500. Both work for long-term growth, but total market funds add small and mid caps to the mix.
Building a Two-Fund Portfolio
Many experts have shown that a simple two-fund or three-fund portfolio can compete with much fancier setups. A common version looks like this:
- 70 to 90 percent in a total U.S. market fund like VTSAX or FZROX
- 10 to 30 percent in a bond index fund such as Vanguard's VBTLX
Younger investors can skip bonds entirely if they have a long timeline. Closer to retirement, the bond slice usually grows.
This approach keeps costs near zero and removes the temptation to tinker.
Risks Worth Considering
Low fees and broad indexing do not remove risk. The U.S. stock market has dropped 30 to 50 percent multiple times throughout history.
Investing involves risk and past performance does not guarantee future results. The funds above hold up well in the long run, but the bumpy years are real and can last a while.
Keep an emergency fund in cash so you never have to sell during a bad stretch.
Frequently Asked Questions
What is the difference between VFIAX and FXAIX?
Both track the S&P 500 with nearly identical performance. The main differences are the issuer and the expense ratio. FXAIX charges 0.015 percent at Fidelity, while VFIAX charges 0.04 percent at Vanguard. Either one is an excellent choice if held in the right brokerage.
Are mutual funds better than ETFs for retirement accounts?
In retirement accounts, the difference is small. Mutual funds make automatic recurring investments very easy, which suits 401(k) and IRA contributions. ETFs offer intraday trading and slight tax advantages that mostly matter in taxable accounts.
Can I lose all my money in a mutual fund?
Losing 100 percent in a diversified index fund is essentially impossible, since it would require thousands of companies to go to zero at once. Narrow sector or single-country funds carry more concentrated risk. Sticking to broad index funds is the safest path for long-term investors.
How much should I invest in mutual funds each month?
A common target is 10 to 15 percent of gross income, including any employer 401(k) match. If that feels too high, start at 1 percent and bump it up over time. The habit of investing every month is more important than the exact amount in the early years.
