Not all ETFs are created equal. Passive index funds are in a fierce "race to zero," while active managers and niche thematic funds still command a premium. Here's how the averages break down across our 86-ETF index:
| Category | Avg Expense Ratio | Median Expense Ratio | Cheapest ETF | ETFs in Sample |
|---|---|---|---|---|
| US Equity (Passive Index) | 0.08% | 0.04% | SPLG (0.02%) | 26 |
| Bond | 0.11% | 0.07% | BND / AGG (0.03%) | 10 |
| International | 0.15% | 0.07% | VEA (0.05%) | 8 |
| Dividend | 0.18% | 0.08% | VIG (0.05%) | 9 |
| Sector | 0.09% | 0.09% | SCHH (0.07%) | 14 |
| Thematic | 0.40% | 0.35% | QQQM (0.15%) | 7 |
| Commodity | 0.41% | 0.50% | GLDM (0.10%) | 6 |
| Overall (86 ETFs) | 0.164% | 0.09% | SPLG (0.02%) | 86 |
Key insight: The gap between the mean (0.164%) and median (0.09%) tells you that a few expensive thematic and commodity funds skew the average upward. The majority of core index funds sit well below 0.10%. If you're paying more than 0.05% for a broad US index fund in 2026, you're almost certainly overpaying.
These are the absolute cheapest ETFs available to retail investors in 2026, ranked by expense ratio. Every fund on this list charges 0.05% or less — meaning on a $100,000 portfolio, you're paying at most $50/year in fees.
| # | Ticker | Fund Name | Category | Expense Ratio | AUM | 1Y Return |
|---|---|---|---|---|---|---|
| 1 | SPLG | SPDR Portfolio S&P 500 ETF | US Equity | 0.02% | $48B | 14.3% |
| 2 | VOO | Vanguard S&P 500 ETF | US Equity | 0.03% | $560B | 19.3% |
| 3 | IVV | iShares Core S&P 500 ETF | US Equity | 0.03% | $530B | 19.3% |
| 4 | VTI | Vanguard Total Stock Market ETF | US Equity | 0.03% | $430B | 19.4% |
| 5 | ITOT | iShares Core S&P Total US Stock Market ETF | US Equity | 0.03% | $65B | 19.2% |
| 6 | SPTM | SPDR Portfolio S&P 1500 Composite ETF | US Equity | 0.03% | $10B | 19.1% |
| 7 | BND | Vanguard Total Bond Market ETF | Bond | 0.03% | $115B | 6.0% |
| 8 | AGG | iShares Core US Aggregate Bond ETF | Bond | 0.03% | $115B | 6.2% |
| 9 | SCHB | Schwab US Broad Market ETF | US Equity | 0.03% | $28B | 19.3% |
| 10 | SCHZ | Schwab US Aggregate Bond ETF | Bond | 0.03% | $8B | 6.2% |
| 11 | SCHG | Schwab US Large-Cap Growth ETF | US Equity | 0.04% | $35B | — |
| 12 | SCHV | Schwab US Large-Cap Value ETF | US Equity | 0.04% | $12B | — |
| 13 | VUG | Vanguard Growth ETF | US Equity | 0.04% | $130B | — |
| 14 | VTV | Vanguard Value ETF | US Equity | 0.04% | $115B | — |
| 15 | VO | Vanguard Mid-Cap ETF | US Equity | 0.04% | $60B | — |
Bottom line: The cheapest ETFs in 2026 cost between $20-$50 per year on $100K invested. SPLG leads at just 0.02%, followed closely by the Vanguard, iShares, and Schwab families at 0.03-0.04%. If you're building a core index portfolio, any of these funds will serve you well at essentially negligible cost.
| Ticker | Fund Name | Issuer | Expense Ratio | AUM ($B) | Category | Div Yield | Index Tracked | Inception |
|---|
Over the past decade, the asset management industry has experienced massive fee compression. The average expense ratio for an equity mutual fund in 2000 was nearly 1.00%. By 2010, the proliferation of ETFs pushed that average closer to 0.70%.
Today, as our 2026 analysis shows, the overall ETF average has fallen to 0.164%, largely driven by the explosive growth of passive index funds which now routinely charge less than 0.05%. This "race to zero" has saved retail investors billions of dollars in aggregate, forcing even active managers to justify their fees with clear outperformance or highly specialized strategies.
The fee war is far from over. Fidelity launched zero-fee index mutual funds in 2018, and multiple issuers continue to trim expense ratios annually. For investors, this is unambiguously good news — every basis point saved compounds to real wealth over decades.
All four ETFs track the same S&P 500 index and deliver nearly identical returns. The only meaningful difference is cost. Here's how they compare in 2026:
| Feature | SPLG | VOO | IVV | SPY |
|---|---|---|---|---|
| Expense Ratio | 0.02% | 0.03% | 0.03% | 0.0945% |
| Annual Cost per $100K | $20 | $30 | $30 | $94.50 |
| 30-Year Cost on $100K (7% growth) | ~$1,900 | ~$2,800 | ~$2,800 | ~$8,800 |
| AUM | $48B | $560B | $530B | $590B |
| Dividend Yield | 1.3% | 1.3% | 1.3% | 1.2% |
| Issuer | State Street (SPDR) | Vanguard | BlackRock (iShares) | State Street (SPDR) |
| Inception | 2005 | 2010 | 2000 | 1993 |
| Structure | Open-end ETF | Open-end ETF | Open-end ETF | Unit Investment Trust |
| Best For | Cost-conscious buy-and-hold | Long-term core holding | Long-term core holding | Day trading & options |
Bottom line: SPLG is the cheapest S&P 500 ETF in 2026 at 0.02%. VOO and IVV are nearly as cheap at 0.03%. SPY costs 3–5× more due to its legacy unit investment trust structure, which prevents fee reductions. For long-term investors, SPLG or VOO will save thousands over a 30-year horizon. SPY remains the best choice for active traders who need maximum liquidity and tight options spreads. See our full S&P 500 index fund comparison.
Vanguard and Schwab are the two cheapest ETF providers. Here's how their competing funds stack up:
| Category | Vanguard ETF | Expense Ratio | Schwab ETF | Expense Ratio | Winner |
|---|---|---|---|---|---|
| Total US Market | VTI | 0.03% | SCHB | 0.03% | Tie |
| Large-Cap Growth | VUG | 0.04% | SCHG | 0.04% | Tie |
| Large-Cap Value | VTV | 0.04% | SCHV | 0.04% | Tie |
| Small-Cap | VB | 0.05% | SCHA | 0.04% | Schwab |
| International Developed | VEA | 0.05% | SCHF | 0.06% | Vanguard |
| Dividend | VIG (0.05%) / VYM (0.06%) | 0.05–0.06% | SCHD | 0.06% | Vanguard (VIG) |
| US Aggregate Bond | BND | 0.03% | SCHZ | 0.03% | Tie |
| REIT | VNQ | 0.12% | SCHH | 0.07% | Schwab |
| Average across lineup | 0.055% | 0.046% | Schwab | ||
Verdict: Schwab's average expense ratio (0.046%) narrowly beats Vanguard (0.055%), but the differences are razor-thin in most categories. Both providers offer excellent low-cost options. Vanguard has a wider ETF lineup (17 vs 8 in our index) and significantly larger AUM, which may offer slight advantages in tracking accuracy and liquidity. For most investors, either provider is an excellent choice — the difference of 0.01% on $100K is just $10/year.
See exactly how much your expense ratio is costing you over time. Even small differences compound dramatically.
Over years, this expense ratio costs you in total fees and lost compounding growth compared to a zero-fee portfolio.
Enter the expense ratio of an ETF you own (or are considering) to see how it compares to the market and what percentile it falls into.
Expense ratios were sourced from official fund prospectuses filed with the SEC and verified against issuer websites (Vanguard, iShares/BlackRock, SPDR/State Street, Schwab, Invesco, and others). AUM figures are approximate as of Q1 2026 and may fluctuate with market conditions and fund flows.
This index covers 86 of the most widely held ETFs across seven categories: US Equity, International, Bond, Sector, Thematic, Dividend, and Commodity. ETFs were selected based on AUM, trading volume, and investor relevance. All data is publicly available from official fund documentation.
Expense ratios represent the total annual fund operating expenses as a percentage of assets. They are deducted from fund returns automatically and reduce the net asset value over time. Lower expense ratios directly benefit long-term investors. For a deeper explanation, see our guide to how ETF expense ratios work.
Category averages were computed from the 86 ETFs in our sample. The "average ETF expense ratio" figures in our category table use simple (unweighted) means. Asset-weighted averages would be lower due to the concentration of assets in the cheapest funds.
Westmount Research. "ETF Expense Ratios 2026: 86 ETFs Ranked + Average by Category." Published March 9, 2026. Updated March 31, 2026. https://westmountfundamentals.com/etf-expense-ratios