How to Pick a Total Market Fund

Total stock market index funds are the purest expression of passive investing. They capture nearly the entire investable stock market, whereas the S&P 500 captures roughly 80% of it. These portfolios typically hold several thousand stocks, charge low fees, and are great options for long-term US stock investors.

The portfolios of such index funds are market-cap weighted, which is a simple, cost-effective approach that sizes positions based on company size. Turnover and trading costs stay low because position sizes adjust automatically as prices change. Combined with their typically low fees, this has historically given total market index funds a durable performance edge over most actively managed peers.

Broader mandates also mean less concentration in the market’s largest names. The average total market fund held roughly 32% of assets in its 10 largest stocks, compared with 36% for S&P 500 funds at the end of March 2026. That difference worked against total market funds during the recent mega-cap rally, but greater diversification will benefit total market funds should smaller stocks regain their footing or if mega-caps falter.

There are several total market funds, each with distinct rules. The main difference between them is breadth—or how much of the stock market they hold. Additionally, some total market funds don’t own every stock that their target index does, instead holding a representative sample of the index. Portfolio managers may choose this approach to limit transaction costs, which can balloon in smaller or difficult-to-trade stocks.

Fees, Fees, Fees

Cheap funds tend to be the best performers, regardless of portfolio differences. The chart below shows the clear relationship between a fund’s expense ratio and its performance.

Not All Total Market Indexes Are the Same

The US total market has no definitive benchmark. Instead, several competing indexes carve up the investable universe somewhat differently. The most common benchmarks hold anywhere from 2,000 to roughly 4,000 stocks, with one exception: the S&P Composite 1500 Index. State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF SPTM replicates this benchmark, which holds the largest 1,500 stocks whose businesses are profitable. These 1,500 companies make up around 90% of the total US stock market, while other total market funds collect at least 95% of the market.

This distinction is minor in practice. The indexes all use market-cap weighting, are overwhelmingly dominated by the same large-cap stocks, and have delivered nearly identical long-run returns. For example, Vanguard Total Stock Market ETF VTI held 3,500 stocks at the end of March 2026, and Schwab U.S. Broad Market ETF SCHB held only 2,400. However, their annualized performance differed by just 2 basis points over the past 10 years—a difference few investors are likely to notice.

ETFs vs. Mutual Funds

Most investors access total market index strategies through exchange-traded funds and mutual funds. ETFs trade on an exchange throughout the day like a stock; mutual funds price once daily after the market closes.

There’s virtually no difference between the two vehicles for investors in tax-deferred accounts like health savings accounts, IRAs, or 401(k)s, assuming all dividends are reinvested. On top of that, investors often don’t have a choice between multiple total market funds to choose from in their employer-sponsored retirement plans.

Luckily, the institutional share classes commonly available in employers’ 401(k)s charge razor-thin fees. Fidelity Total Market Index FSKAX is a mutual fund available to any investor and charges only 0.015%. Fidelity Zero Total Market Index FZROX is available to investors custodied at Fidelity for no annual cost. It tracks a proprietary benchmark, the Fidelity US Total Investable Market Index, though investors who leave Fidelity can’t take the fund with them.

The vehicle matters more for investors in taxable accounts. ETFs’ in-kind creation and redemption mechanism enables ETFs to mostly avoid capital gains distributions, making them more tax-efficient than mutual funds. In fact, none of the major total market ETFs have paid out capital gains in the past decade. Most total market ETFs and mutual funds also engage in securities lending, allowing them to earn back a portion of their fees and slightly improve investor returns.

Capital gains distributions from mutual funds tend to be small, but they’re not zero. Investors in taxable accounts will need to pay Uncle Sam a portion of those distributions, even if they didn’t sell a single share. That’s a small but noticeable cost to mutual fund investors.

The Best Total Market Funds for Long-Term Investors

Choosing a low-cost fund is always a smart option for long-term investors, and those with taxable accounts should likely favor ETFs. Mutual funds are more common in employer-sponsored tax-deferred accounts, where the tax advantage of ETFs is neutralized. Many of the most common total market funds available in these sponsored plans are also some of our favorites.

Below are some highly-rated total market funds available to all investors, and some great choices that could be offered by an employer through a 401(k) plan.

Morningstar acquired the Center for Research in Security Prices, the index provider for Vanguard Total Stock Market ETF, in February 2026.