The cheapest index funds of 2026: a TER ranking, category by category
Almost every "best index funds" list mixes past performance with opinion. This one does not: it ranks by a single objective, checkable criterion — the TER (total annual cost). It is the only fact about the future you know for certain on the day you invest. Returns are not.
Why cost and not returns
Two funds tracking the same index will have almost identical returns before fees. What separates them over 20 years is what they charge. And unlike returns, cost is certain, recurring, and someone collects it no matter what happens.
The scale matters more than it looks: on €100,000, the gap between 0.07% and 0.40% is €330 in the first year, but compounded over 25 years it becomes tens of thousands. Hence the ranking.
Global equity (MSCI World / ACWI / FTSE All-World)
| Fund or ETF | Provider | ISIN | TER |
|---|---|---|---|
| Amundi Prime All Country World | Amundi | IE0003XJA0J9 | 0.07% |
| Vanguard FTSE Developed World | Vanguard | IE00BKX55T58 | 0.12% |
| Fidelity MSCI World Index Fund P-ACC-EUR | Fidelity | IE00BYX5NX33 | 0.12% |
| SPDR MSCI World | SPDR | IE00BFY0GT14 | 0.12% |
| SPDR MSCI ACWI | SPDR | IE00B44Z5B48 | 0.12% |
Note the nuance almost nobody flags: they do not all track the same index. The Amundi Prime All Country World and the SPDR MSCI ACWI include emerging markets; the Vanguard FTSE Developed World and the MSCI World ones do not. Comparing their TERs is fair, but you are not comparing the same product. We explain it in what the MSCI World is.
US equity (S&P 500)
| Fund or ETF | Provider | ISIN | TER |
|---|---|---|---|
| SPDR S&P 500 | SPDR | IE00B6YX5C33 | 0.03% |
| Invesco S&P 500 | Invesco | IE00B3YCGJ38 | 0.05% |
| Fidelity S&P 500 Index Fund P-ACC-EUR | Fidelity | IE00BYX5MX67 | 0.06% |
| iShares Core S&P 500 | iShares | IE00B5BMR087 | 0.07% |
| Vanguard S&P 500 | Vanguard | IE00B3XXRP09 | 0.07% |
It is the cheapest category on the market, simply because it is where competition is fiercest. A 0.03% TER means €30 a year per €100,000 invested.
Emerging markets
| Fund or ETF | Provider | ISIN | TER |
|---|---|---|---|
| HSBC MSCI Emerging Markets | HSBC | IE000KCS7J59 | 0.15% |
| iShares Core MSCI EM IMI | iShares | IE00BKM4GZ66 | 0.18% |
| Xtrackers MSCI Emerging Markets | Xtrackers | IE00BTJRMP35 | 0.18% |
| Invesco MSCI Emerging Markets | Invesco | IE00B3DWVS88 | 0.18% |
| Fidelity MSCI Emerging Markets Index Fund | Fidelity | IE00BYX5M476 | 0.19% |
European equity
| Fund or ETF | Provider | ISIN | TER |
|---|---|---|---|
| Invesco EURO STOXX 50 | Invesco | IE00B60SWX25 | 0.05% |
| Amundi Stoxx Europe 600 | Amundi | LU0908500753 | 0.07% |
| Xtrackers DAX | Xtrackers | LU0274211480 | 0.09% |
| Vanguard FTSE Developed Europe | Vanguard | IE00B945VV12 | 0.10% |
| Vanguard FTSE 250 | Vanguard | IE00BKX55Q28 | 0.10% |
The warning is stronger here: the EURO STOXX 50 is 50 eurozone companies and the DAX is 40 German ones. They are far less diversified than a Stoxx Europe 600. The lowest TER in the table is also the most concentrated index — a good reminder that ranking by cost does not rank by quality.
Bonds
| Fund or ETF | Provider | ISIN | TER |
|---|---|---|---|
| Amundi US Treasury Bond 7-10Y | Amundi | LU1407887915 | 0.06% |
| Invesco US Treasury Bond 7-10 Year | Invesco | IE00BF2FN646 | 0.06% |
| iShares Core € Govt Bond | iShares | IE00B4WXJJ64 | 0.07% |
| iShares $ Treasury Bond 7-10yr | iShares | IE00B1FZS467 | 0.07% |
| iShares Core Global Aggregate Bond EUR-H | iShares | IE00BDBRDM35 | 0.10% |
In bonds there is a decision that comes before cost: if the bond is in dollars, you take currency risk. The last one on the list is currency-hedged to euros, which is why it costs a bit more. For a euro-based investor that is no small detail.
Dividends
| Fund or ETF | Provider | ISIN | TER |
|---|---|---|---|
| iShares MSCI Europe Quality Dividend Advanced | iShares | IE00BYYHSM20 | 0.28% |
| Vanguard FTSE All-World High Dividend Yield | Vanguard | IE00B8GKDB10 | 0.29% |
| Vanguard FTSE All-World High Div. Yield (Acc) | Vanguard | IE00BK5BR626 | 0.29% |
| WisdomTree US Quality Dividend Growth | WisdomTree | IE00BZ56RG20 | 0.29% |
| SPDR S&P Euro Dividend Aristocrats | SPDR | IE00B5M1WJ87 | 0.30% |
Dividend products cost four times what an S&P 500 does, because they do not track a broad index but a rules-filtered one. If income is your goal, work out how much capital you actually need first in living off dividends.
Browse the full ranking: these tables are the top 5 of each category. You can see all 219 funds ranked by cost and filter by category, provider or distribution type in the full catalog.
What the TER does not tell you
This is where these rankings get dangerous if you only read the first row. Five things the TER does not capture:
- Tracking difference. A fund can have a 0.07% TER and still land 0.15% below its index because of weaker replication or less efficient dividend taxation. What matters is what you end up with, not what the factsheet says.
- Fund size. A small fund can be closed or merged, forcing a sale you did not want to make.
- Accumulating or distributing. An accumulating fund defers tax; a distributing one taxes you every year even if you never sell. In Spain the difference is large.
- Fund or ETF. Only mutual funds allow Spain's tax-free transfer between providers. A cheaper ETF can cost you more the moment you want to switch. We compare them in ETF vs index fund.
- Whether you can actually buy it. The cheapest fund on the list is useless if your broker does not offer it or charges you to trade it.
How to use this ranking
The sensible way: pick the index first, then decide accumulating vs distributing and fund vs ETF, and only then rank by TER among the options that work for you. Ranking by cost before deciding your exposure is doing it backwards. The full process is in how to choose an index fund.
In short
- The TER is the only fact about the future you know for certain; that is why we rank by it and not by past returns.
- Cheapest per category: 0.03% in S&P 500, 0.05% in Europe, 0.06% in bonds, 0.07% global, 0.15% emerging markets and 0.28% dividends.
- The cheapest in a table is not automatically the best: check the index, the size, the distribution policy and whether your broker offers it.
Data from this site's catalog, using the TER each provider publishes. Educational content, not a buy recommendation: always confirm the figures in the official KIID/prospectus before investing.