ONEFUND S&P 500 (INDEX) is an index fund ranked as ‘Buy’ with a Zacks Mutual Fund Rank of 2. The fund, managed by Michael Willis since its inception in April 2015, has amassed $154.61 million in assets.
The fund boasts a 5-year annualised return of 17.01%, placing it in the top third among peers. Over 3 years, its annualised return is 17.97%, falling in the bottom third. Returns might not reflect all expenses, and including sales charges would reduce total returns.
Volatility Comparison
The standard deviation over 3 years is 13.92%, showing more volatility than the category average of 13.78%. Over 5 years, it has a standard deviation of 16.65% compared to the average of 15.9%. INDEX holds a 5-year beta of 1.01, matching market volatility, and a negative alpha of -0.55 over 5 years, indicating underperformance relative to the S&P 500.
The fund focuses on US-traded equities, with 83.92% in stocks. It primarily invests in sectors such as Technology, Finance, and Retail Trade. It has a turnover rate of 18%, suggesting higher trading activity than comparable funds.
INDEX has no sales load and an expense ratio of 0.25%, lower than the category average of 0.71%. The minimum initial investment required is $1,000, with subsequent investments needing to be at least $100.
The slightly higher volatility noted in this S&P 500 fund is something we should pay attention to right now. The VIX has been elevated, holding near 19 for the past month, which is a noticeable shift from the calmer markets we saw in the summer of 2025. This suggests options premiums may remain rich, creating opportunities for selling strategies like covered calls or credit spreads on broad market indexes.
Market Performance and Strategy
The fund’s negative alpha and recent struggles highlight a key market theme: not all index trackers are performing equally. The S&P 500’s year-to-date gain of roughly 12% has been heavily driven by a handful of mega-cap tech stocks that have recently stalled since their October 2025 highs. For us, this presents potential pairs trading opportunities, perhaps using options on specific sectors rather than the entire index.
Given the heavy exposure to technology and finance, we need to consider the impact of recent central bank policy. The Federal Reserve’s clear signal in November 2025 for maintaining current interest rates has supported financial sector stocks while creating headwinds for growth-oriented tech. This divergence suggests that options on a technology ETF may be a better tool for expressing a view than options on the S&P 500 as a whole.
The fund’s high turnover rate of 18% is unusual for a passive index product and may signal managers are struggling to track the benchmark in a choppy market. We saw this back during the volatile periods of 2022, where rebalancing became more frequent and costly for many funds. This environment could favor strategies that profit from sideways movement, such as iron condors on the SPX, especially as we head into the typically lower-volume holiday trading weeks.
