ONEFUND S&P 500 (INDEX) is a recommended index fund with a Zacks Mutual Fund Rank of 2. Managed by Michael Willis since April 2015, it has $154.61 million in assets. The fund has a solid 5-year annualized return of 17.01%, placing it in the top third of similar funds. However, its 3-year annualized return is lower at 17.97%, putting it in the bottom third. Keep in mind that returns may not account for all expenses, and sales charges will lower total returns.

Volatility Comparison

The fund’s standard deviation over three years is 13.92%, which is higher than the category average of 13.78%. Over five years, it has a standard deviation of 16.65%, exceeding the average of 15.9%. The fund has a 5-year beta of 1.01, indicating it mirrors market volatility, and an alpha of -0.55, suggesting it underperformed compared to the S&P 500. Investing primarily in US stocks, the fund allocates 83.92% of its assets in equities, mainly in the Technology, Finance, and Retail Trade sectors. With an 18% turnover rate, the fund shows more trading activity than its peers. The fund has no sales load and an expense ratio of just 0.25%, which is lower than the category average of 0.71%. To start investing, a minimum initial investment of $1,000 is required, with subsequent investments at a minimum of $100. The slightly increased volatility in this S&P 500 fund is noteworthy. The VIX index has remained around 19 for the past month, indicating a shift from the calmer markets of summer 2025. This suggests that options premiums could remain high, presenting opportunities for strategies like covered calls or credit spreads on broader market indexes.

Market Performance and Strategy

The fund’s negative alpha and recent challenges emphasize that not all index trackers perform the same way. The S&P 500 has gained around 12% year-to-date, largely due to a few major tech stocks, which have recently plateaued since their highs in October 2025. This situation could create opportunities for pairs trading, possibly by using options on specific sectors instead of the entire index. Given the fund’s significant exposure to technology and finance, we must consider the effects of recent central bank policies. The Federal Reserve’s decision in November 2025 to keep interest rates steady has helped financial stocks but has posed challenges for growth-oriented tech. This situation suggests that options on a technology ETF might be more effective for expressing a view than options on the S&P 500 overall. The fund’s unusual 18% turnover rate for a passive index product may indicate that managers are struggling to keep up with the benchmark in a volatile market. We witnessed similar trends during the unsettled periods of 2022 when rebalancing became more frequent and expensive for many funds. In this environment, strategies benefiting from sideways movement, such as iron condors on the SPX, may be more favorable, especially as we approach the typically low-volume holiday trading weeks. Create your live VT Markets account and start trading now.

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