Fidelity ZERO Large Cap Index Fund (FNILX)

The S&P 500 Index is widely regarded as the benchmark index for the U.S. stock market. Several funds track the S&P 500 in order to provide investors with convenient exposure to U.S. equities.

But if a fund wants to use the S&P 500 name, it has to pay a licensing fee that essentially gets passed on to investors.

The Fidelity ZERO Large Cap Index Fund closely mirrors the performance of the S&P 500. But it’s not an “official” S&P 500 copycat, so it doesn’t have to pay the licensing fee. In turn, FNILX boasts an expense ratio of 0%.

Every dollar you put into FNILX gets put to work.

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Vanguard Small-Cap ETF (VB)

Small-cap stocks don’t get as much attention as their large-cap counterparts. But investors shouldn't ignore them.

The largest companies we see today were once small. Companies with plenty of room to grow have tremendous upside.

For a low-cost way to invest in this growth-oriented group, investors can check out Vanguard Small-Cap ETF. It tracks the CRSP U.S. Small Cap Index, which measures companies in the bottom 2%-15% of the investable universe.

VB is diversified, holding around 1,550 stocks. It also has a low expense ratio of just 0.05%.

One thing to keep in mind: Because small-cap stocks are relatively young, they tend to be more volatile than more established large-cap names.

Vanguard Total International Stock ETF (VXUS)

To truly diversify your portfolio — especially in this age of globalization — having some exposure outside of the U.S. is essential. Thankfully, it’s easy these days to invest overseas.

For instance, Vanguard Total International Stock ETF seeks to match the performance of the FTSE Global All Cap ex-US Index. By owning this index fund, investors get broad exposure across developed, as well as emerging non-U.S. equity markets.

The fund’s top holdings include global industry titans such as Samsung Electronics, Nestle, Tencent Holdings and Toyota. It also owns smaller names and holds over 7,800 stocks, with an expense ratio of 0.07%.

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Alternative investments

With the S&P 500 down since the start of the year, it may be a good time to look at investments that don't track the stock market, such as blue-chip art. Fine art has traditionally only been available to wealthy investors with the thousands or millions needed to buy high-end artworks. But thanks to a new platform that allows buyers to purchase shares of artworks, the art world is now accessible to investors at every price point.

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About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, Jing was a research analyst and editor at one of the leading financial publishing companies in North America. Jing has covered numerous aspects of the financial markets, from blue chip dividend stocks to small cap tech stocks to precious metals and currency. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. In his spare time, Jing plays basketball, the violin and the ukulele.

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