Index Funds on Robinhood: What You Can Buy and How

Robinhood offers index funds through two routes: fractional shares of individual index ETFs, and mutual funds from a small set of providers

Robinhood does not let you buy traditional mutual funds directly the way a brokerage like Vanguard or Fidelity does. Instead, you can buy exchange-traded funds (ETFs) that track indexes — these trade like stocks and you can own a fraction of one share. You can also buy a limited selection of mutual funds, but the menu is much smaller than what you would find elsewhere.

The practical difference: if you want to own an S&P 500 index fund on Robinhood, you would buy shares of an ETF like VOO or IVV rather than a mutual fund like VFIAX. Both track the same index and charge similar fees, but the ETF trades throughout the day while a mutual fund settles at the end of the day. For most long-term investors, this distinction does not matter.

Robinhood's fractional share feature means you can invest any dollar amount — $1, $50, $500 — without waiting to save up for a full share price. This removes a real barrier for people starting small.

Key Takeaways

• Robinhood lets you buy index-tracking ETFs with fractional shares, so you can invest any amount without owning a full share.
• The most common index ETFs — VOO, VTI, IVV, SPLG — are all available on Robinhood with no commission.
• Robinhood offers a small number of mutual funds, but the selection is limited compared to traditional brokerages.
• ETFs on Robinhood charge the same expense ratios as they do elsewhere; the platform does not add fees on top.

Index ETFs available on Robinhood and their expense ratios

The index ETFs you are most likely to want are all available. VOO (Vanguard S&P 500 ETF) charges 0.03% per year. VTI (Vanguard Total Stock Market ETF) charges 0.03%. IVV (iShares Core S&P 500 ETF) charges 0.03%. SPLG (SPDR Portfolio S&P 500 ETF) charges 0.02%. These are among the cheapest ways to own a broad market index anywhere.

For international stock exposure, VXUS (Vanguard Total International Stock ETF) costs 0.08% per year. For bonds, BND (Vanguard Total Bond Market ETF) costs 0.03%. For a mix of stocks and bonds in one fund, AOR (iShares Growth Allocation ETF) costs 0.20%.

Robinhood charges no commission to buy or sell these ETFs — you pay only the expense ratio that the fund itself charges. You will not see a separate trading fee. The fractional share feature means you can buy $50 of VOO if you want, and Robinhood will hold 0.15 shares (or whatever fraction $50 buys at that day's price).

How mutual funds work on Robinhood

Robinhood added mutual fund access in 2023, but the selection is small. You can buy mutual funds from Vanguard, Fidelity, and Schwab — roughly 150 funds total across all three providers. This is a fraction of what each company offers directly.

The main mutual funds available include VTSAX (Vanguard Total Stock Market Index Mutual Fund, 0.04% expense ratio), VFIAX (Vanguard S&P 500 Index Mutual Fund, 0.04%), and FSKAX (Fidelity Total Market Index Fund, 0.015%). These are solid index funds, but you can buy the same indexes as ETFs for the same or lower cost.

Mutual funds on Robinhood settle at the end of the trading day, meaning if you place an order at 2 p.m., you will not own the shares until the next morning. ETFs settle immediately. For a long-term investor, this timing difference does not matter.

Why ETFs are usually the better choice on Robinhood

If you are building a portfolio on Robinhood, ETFs are simpler than mutual funds for three reasons. First, you can buy fractional shares of an ETF but not a mutual fund — if you have $100 to invest, you can own $100 of VOO immediately, but you may not be able to own $100 of VFIAX if the share price is higher. Second, ETFs trade all day, so you see the price in real time and can buy when you want. Mutual funds price once per day. Third, the expense ratios are identical or lower for ETFs.

The only reason to choose a mutual fund on Robinhood is if you already own one elsewhere and want to consolidate, or if you have a strong preference for a specific fund that is not available as an ETF. For new investors, ETFs are the path of least resistance.

Building a simple index portfolio on Robinhood

A three-fund portfolio — U.S. stocks, international stocks, and bonds — is straightforward to build. Buy VTI for U.S. stock exposure (0.03% expense ratio), VXUS for international stocks (0.08%), and BND for bonds (0.03%). You can split your money however you want: 60% VTI, 20% VXUS, 20% BND is a common starting point for someone in their 30s or 40s.

Set up automatic deposits if Robinhood offers them in your account type. Buy the same three funds every month in the same proportions. Over time, this approach builds wealth with minimal effort and minimal cost. You will not beat the market, but you will own the market at a price that leaves more money in your pocket.

Robinhood also offers dividend reinvestment (DRIP) for ETFs, meaning any dividends the fund pays are automatically used to buy more shares. This is useful for long-term holding and removes the need to manually reinvest small amounts.

Fees and costs you should know about

Robinhood charges no commission on ETF or mutual fund purchases. You pay only the expense ratio built into the fund itself. If you buy $1,000 of VOO at 0.03% per year, you pay $0.30 per year in fees — that is it.

If you sell an ETF or mutual fund at a loss, you can use that loss to offset capital gains elsewhere in your portfolio (a practice called tax-loss harvesting). Robinhood does not charge extra for this, though you should track the transactions yourself or use tax software to report them correctly.

One cost to watch: if you buy and sell the same fund repeatedly in a short time, you may trigger wash-sale rules that prevent you from claiming the loss. This is a tax rule, not a Robinhood rule, but it matters if you are actively trading index funds rather than holding them long-term.

Frequently Asked Questions

Can I set up automatic monthly investments in index funds on Robinhood?

Robinhood offers automatic deposits if you have a standard brokerage account (not a retirement account). You can set up recurring transfers from your bank, and then manually buy the same index funds each month, or use Robinhood's recurring investment feature if available in your account type. Check your account settings to see what options are enabled.

Are index ETFs on Robinhood the same price as on other brokerages?

Yes. VOO costs the same whether you buy it on Robinhood, Vanguard, Fidelity, or any other broker. The share price is set by the market. Robinhood does not mark up the price or add hidden fees. The only difference is that some brokerages offer lower expense ratios on their own funds — Vanguard's VFIAX costs 0.04%, but you can buy the same index as VOO for 0.03% on any platform.

What if I want to move my index funds to a different brokerage later?

You can transfer ETFs and mutual funds out of Robinhood to another brokerage through an ACAT transfer (Automated Customer Account Transfer). The receiving brokerage handles most of the paperwork. There is no tax consequence — you are moving the shares themselves, not selling them. Some brokerages waive transfer fees if you move a large enough balance.

Do I need a retirement account to buy index funds on Robinhood?

No. You can buy index funds in a regular taxable brokerage account on Robinhood. However, if you are saving for retirement, a Roth IRA or traditional IRA will give you tax benefits that a taxable account does not. Robinhood offers both IRA types, and you can buy the same index funds inside them.

What is the minimum investment to start buying index funds on Robinhood?

There is no minimum. Because Robinhood offers fractional shares, you can invest $1 if you want. Most people start with $100 or $500 to keep the account active and make the monthly contributions meaningful, but the platform does not require it.