Mutual Funds typically invest in stocks and fixed-income securities. However, there are funds that, along with investing in such securities, may also invest in derivatives contracts such as options and futures. Such types of investing allow funds to hedge their risk, and for investors, it helps them to diversify their portfolios. Let’s take a look at the ten best performing options trading funds.
Ten Best Performing Options Trading Funds
We have referred to the last one-year return numbers (from money.usnews.com) to rank the ten best performing options trading funds. Following are the ten best performing options trading funds:
10. Glenmede Secured Options Portfolio (17%)
Normally at least 80% of Glenmede Secured Options Portfolio's (MUTF:GTSOX) total assets will be subject to secured option strategies. It has returned almost 1% in the last three months and almost 9% in the last three years. GTSOX has more than $378 million in total assets.
9. Neuberger Berman US Equity INdex PutWrite Strategy Fund (17%)
Neuberger Berman U.S. Equity Index PutWrite Strategy Fund (MUTF:NUPAX) tries to achieve its objectives by writing collateralized put options on the S&P 500® Index and the Russell 2000® Index. It has returned almost 1% in the last three months and over 10% in the last three years. NUPAX has more than $513 million in total assets. The top two holdings of this fund are: United States Treasury Notes 0.5% and United States Treasury Notes 0.25%.
8. Swan Defined Risk Fund (18%)
Swan Defined Risk Fund (MUTF:SDRAX) mainly invests in ETFs, equity securities represented in the S&P 500 Index, and exchange-traded long-term put options on the S&P 500 Index. It also buys and sells exchange-traded put and call options on various equity indices. It has returned almost 1% in the last three months and over 8% in the last three years. SDRAX has more than $1.10 billion in total assets. The top three holdings of this fund are: Technology Select Sector SPDR® Fund (NYSE:XLK), iShares Core S&P 500 ETF (NYSE:IVV) and Health Care Select Sector SPDR® Fund (NYSE:XLV).
7. Parametric Volatility Risk Premium Defensive Fund (18%)
Parametric Volatility Risk Premium Defensive Fund (MUTF:EIVPX) invests in a base portfolio that includes a mix of equity securities and money market instruments. It writes (sells) call options on the S&P 500 Index. It has returned almost 1% in the last three months and almost 10% in the last three years. EIVPX has more than $969 million in total assets. The top three holdings of this fund are: Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN).
6. Stone Ridge U.S. Hedged Equity Fd (18%)
Under normal market conditions, a minimum of 80% of the value of the fund's net assets will be subject to written put options on U.S. equity securities. Stone Ridge U.S. Hedged Equity Fund (MUTF:VRLIX) invests in U.S. Treasury securities of varying maturities. It has returned almost 1% in the last three months and almost 11% in the last three years. VRLIX has more than $38 million in total assets.
5. IPS Strategic Capital Absolute Return Fund (19%)
IPS Strategic Capital Absolute Return Fund (MUTF:IPSAX) primarily buys and sells put and call options on equity indexes and exchange traded funds. It has returned almost 1% in the last three months and over 8% in the last three years. IPSAX has more than $71 million in total assets. The top three holdings of this fund are: iShares Core S&P 500 ETF (NYSE:IVV), Future on S&P 500 Index PR, and Option on S&P 500 Index.
4. Gateway Equity Call Premium Fund (19%)
Gateway Equity Call Premium Fund (MUTF:GCPAX) usually invests in a broadly diversified equity portfolio, as well as writes (sells) index call options, in which the aggregate notional value approximately equals the market value of the equity portfolio. It has returned almost 1% in the last three months and over 11% in the last three years. GCPAX has more than $101 million in total assets. The top three holdings of this fund are: Microsoft, Apple and Amazon.
3. West Hills Tactical Core Fund (22%)
West Hills Tactical Core Fund (MUTF:LEBOX) normally invests in common stocks and ETFs included in the S&P 500, as well as in cash and cash equivalents. It has returned almost 1% in the last three months and almost 10% in the last three years. LEBOX has more than $5 million in total assets. The top three holdings of this fund are: SPDR® S&P 500 ETF Trust, Spdr S&P 500 Etf Trust Oct.r 29, 2021 Put at $434.00 and Spdr S&P 500 Etf Trust October 22, 2021 Put at $427.00.
2. Swan Defined Risk Growth Fund (23%)
Swan Defined Risk Growth Fund (MUTF:SDAAX) mainly invests in capitalization-weighted U.S. large capitalization ETFs, which in turn invest in securities represented in the S&P 500 Index, exchange-traded long-term put options on the S&P 500 Index and exchange-traded put and call options on various equity indices. It has returned over 1% in the last three months and over 9% in the last six months. SDAAX has more than $105 million in total assets. The top three holdings of this fund are: iShares Core S&P 500 ETF, S&P 500 Index Spx Us 12/16/22 C4000 and Option on S&P 500 Jun23.
1. Innovative Dividend Performers Fund (25%)
Innovative Dividend Performers Fund (MUTF:IPDPX) primarily invests in dividend paying U.S. stocks, as well as credit spread options on the S&P 500 Index. It has returned over -1% in the last three months and over 3% in the last six months. IPDPX has more than $17 million in total assets. The top five holdings of this fund are: Paychex (NASDAQ:PAYX), Rockwell Automation (NYSE:ROK), Robert Half International (NYSE:RHI) and Accenture (NYSE:ACN).