Does ONEFUND S&P 500 (INDEX) Have What It Takes to Be Your Top Pick?
Investors Take Note: ONEFUND S&P 500 a Strong Performer with Low Fees
The hunt for index funds has led investors to a promising option – ONEFUND S&P 500, which sports a Zacks Mutual Fund Rank of 2 (Buy). This esteemed ranking is based on various forecasting factors including size, cost, and past performance.
History of the Fund/Manager
ONEFUND S&P 500 is part of the Index Funds family of funds, a company based out of Denver, CO. The fund made its debut in April 2015 and has since accumulated assets worth approximately $120.94 million, according to the most recent available information. Michael Willis, the current manager, took the reins in April 2015.
Performance is a crucial aspect that mutual funds are judged on by investors. This fund has delivered a compelling 5-year annualized total return of 14.87%, placing it among its category peers in the middle third. For those who consider shorter time frames, do not disregard looking at the fund’s 3-year annualized total return of 8.31%, which positions it in the bottom third during this period.
It is essential to note that the product’s returns may not reflect all its expenses. Any fees that are not factored into these returns would lead to lower profits. Total returns do not account for the fund’s [%] sale charge; if such charges were included, total returns would have been diminished.
When evaluating a fund’s performance, it is also vital to consider the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, INDEX’s standard deviation comes in at 17.37%, compared to the category average of 16.41%. Over the past five years, the standard deviation of the fund is 16.72% compared to the category average of 16.21%. This makes the fund more volatile than its peers over the past half-decade.
Investors should take heed that the fund has a 5-year beta of 0.98, indicating it is hypothetically as volatile as the market at large. Alpha is another significant metric to consider since it represents a portfolio’s performance on risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -0.37, managers in this portfolio encounter difficulty in picking securities that generate better-than-benchmark returns.
Holdings
Examining the equity holdings of a mutual fund also provides valuable insights into how the manager applies their stated methodology and if there are any inherent biases in their approach. For this particular fund, the focus is mainly geared towards equities traded in the United States.
The mutual fund currently has 78.1% of its holdings in stocks. It is worth noting that these companies have an average market capitalization of $489.36 billion. The fund has the heaviest exposure to the following market sectors: Technology, Finance, and Retail Trade.
Its turnover is approximately 81%, signifying that the fund managers are making more trades than comparable funds within a given year.
Expenses
Costs have become increasingly important for mutual fund investing, especially as competition in this market heats up. And all things being equal, a lower-cost product will outshine its otherwise identical counterpart, so it is essential for investors to take a closer look at these metrics. In terms of fees, INDEX is a no-load fund with an expense ratio of 0.25% compared to the category average of 0.72%. From a cost perspective, INDEX is actually cheaper than its peers.
In addition to expenses, investors should also be aware that the minimum initial investment for this product comes in at $1,000 and that each subsequent investment must be $1,000 as well. Fees charged by investment advisors have not been taken into consideration; returns would be lower if these costs were factored in.
Conclusion
In summary, ONEFUND S&P 500 (INDEX) boasts a high Zacks Mutual Fund rank and, combined with its relatively comparable performance, average risk, and lower fees, this fund looks like an attractive choice for investors right now.
Please note that for additional information on the Index area of mutual funds, visit www.zacks.com/funds/mutual-funds; you can delve even deeper into INDEX or learn more about our ranking process.
And if stock investing is your forte, make sure to also check out our Zacks Rank and explore the full suite of tools available for novice and professional investors alike.
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This article was originally published on Zacks Investment Research (zacks.com).
