Funds for Recent College Grads

Indexing and ETFs. Index funds and exchange-traded funds track indexes, so they're generally cheaper than funds that rely on managers to pick stocks. ETFs, which look like mutual funds but behave like stocks, offer a simple, low-cost way to invest and gain instant diversification. Investors can buy as little as one share of an ETF, whereas mutual funds often require upfront investments of $3,000 or more. Funds that provide exposure to U.S. markets include Schwab's Total Stock Market Index Fund and its U.S. Broad Market ETF. For a globally diversified portfolio, consider Vanguard Total World Stock Index Fund or Total World Stock Index ETF. Both funds offer investors exposure to the United States, the rest of the developed world, and emerging markets.

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