Vanguard S&P 500 ETF
Price
$710.72
YTD
+12.78%
Expense
0.03%
Yield
1.28%
🇺🇸 United States
Best Low-Cost ETFs Under 0.10%
Ultra-cheap ETFs with expense ratios under 0.10% — keep more of your returns.
Low-Cost ETFs: Maximum Returns Through Minimum Fees
Expense ratios are one of the only reliable predictors of future fund performance — funds with lower fees consistently outperform higher-cost alternatives. ETFs charging under 0.10% annually keep virtually all of your returns working for you, with fee savings compounding dramatically over decades.
The Compounding Cost of Fees
On a $500,000 portfolio earning 8% annually over 30 years, the difference between a 0.03% and 0.50% expense ratio is staggering: approximately $320,000 in additional wealth. That's the power of low costs compounding over time. Every basis point matters when measured across decades.
Building a Complete Portfolio Under 0.10%
It is entirely possible to build a globally diversified portfolio with a weighted average expense ratio under 0.05%. Combine VOO (0.03%) for US large-cap, VXF (0.06%) for US mid/small-cap, VXUS (0.07%) for international, and BND (0.03%) for bonds. Total cost: approximately 0.04% — or just $4 per $10,000 invested annually.
When Higher Fees Are Justified
Not all higher-fee ETFs are bad. Specialized strategies (covered calls, options-based income, active management) legitimately require higher expense ratios. The key is ensuring the strategy provides genuine value — measured by after-fee, after-tax risk-adjusted returns — that justifies the additional cost.
🏆 Winner — #1 pick
Vanguard Total Stock Market ETF
Price
$380.93
YTD
+11.92%
Expense
0.03%
Yield
1.32%
iShares Core S&P 500 ETF
Price
$777.13
YTD
+16.20%
Expense
0.03%
Yield
1.32%
Schwab U.S. Large-Cap Growth ETF
Price
$35.84
YTD
+20.50%
Expense
0.04%
Yield
0.35%
Schwab U.S. Large-Cap Value ETF
Price
$34.76
YTD
+8.50%
Expense
0.04%
Yield
2.35%
iShares Core U.S. Aggregate Bond ETF
Price
$96.95
YTD
+3.20%
Expense
0.03%
Yield
4.35%
Vanguard Dividend Appreciation ETF
Price
$243.14
YTD
+12.80%
Expense
0.06%
Yield
1.75%
Vanguard High Dividend Yield ETF
Price
$164.89
YTD
+10.20%
Expense
0.06%
Yield
2.95%
iShares 0-3 Month Treasury Bond ETF
Price
$100.43
YTD
—
Expense
0.07%
Yield
—
SPDR Portfolio S&P 500 ETF
Price
$80.00
YTD
—
Expense
0.02%
Yield
—
Frequently asked questions
What is the cheapest ETF available?
Several ETFs are tied at 0.03% expense ratio, including VOO, VTI, BND from Vanguard and IVV from iShares. Some brokers offer zero-fee proprietary ETFs (like Fidelity ZERO funds), though these may have limitations on portability.
Do expense ratios really matter that much?
Yes, significantly. A 0.50% annual fee on $100,000 costs $500/year, while 0.03% costs just $30. Over 30 years with 8% returns, that difference compounds to nearly $65,000 on a $100,000 initial investment. Lower fees are one of the strongest predictors of higher investor returns.
Are cheap ETFs less safe than expensive ones?
No. Expense ratio has no correlation with fund safety. Low-cost ETFs from major issuers (Vanguard, iShares, Schwab) track well-known indices and hold the same underlying securities as higher-cost alternatives. They simply charge less for the same exposure.
What is a good expense ratio for an ETF?
For passive index ETFs, anything under 0.10% is excellent. For sector or thematic ETFs, under 0.30% is reasonable. For active ETFs, under 0.50% is competitive. Avoid any passive index ETF charging more than 0.20% — cheaper alternatives almost certainly exist.
Can I build a whole portfolio with ETFs under 0.10%?
Absolutely. A portfolio of VOO (0.03%), VXUS (0.07%), and BND (0.03%) covers US stocks, international stocks, and bonds at a blended cost of approximately 0.04%. This three-fund portfolio provides excellent global diversification at minimal cost.