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Is SoFi Select 500 ETF (SFY) a Strong ETF Right Now?
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Making its debut on 04/11/2019, smart beta exchange traded fund SoFi Select 500 ETF (SFY - Free Report) provides investors broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Sofi. SFY has been able to amass assets over $501.75 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, SFY seeks to match the performance of the SOLACTIVE SOFI US 500 GROWTH INDEX .
The Solactive SoFi US 500 Growth Index follows a rules-based methodology that tracks the performance of 500 of the largest U.S.-listed companies weighted based on a proprietary mix of their market capitalization and fundamental factors.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for SFY are 0%, which makes it the least expensive product in the space.
It has a 12-month trailing dividend yield of 1.54%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For SFY, it has heaviest allocation in the Information Technology sector --about 26.70% of the portfolio --while Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Amazon Com Inc (AMZN - Free Report) accounts for about 6.47% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 29.56% of SFY's total assets under management.
Performance and Risk
Year-to-date, the SoFi Select 500 ETF has added roughly 13.74% so far, and is up about 11.17% over the last 12 months (as of 11/02/2023). SFY has traded between $13.06 and $16.24 in this past 52-week period.
The fund has a beta of 1.02 and standard deviation of 18.83% for the trailing three-year period. With about 503 holdings, it effectively diversifies company-specific risk.
Alternatives
SoFi Select 500 ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $89.10 billion in assets, Invesco QQQ has $197.79 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is SoFi Select 500 ETF (SFY) a Strong ETF Right Now?
Making its debut on 04/11/2019, smart beta exchange traded fund SoFi Select 500 ETF (SFY - Free Report) provides investors broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Sofi. SFY has been able to amass assets over $501.75 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, SFY seeks to match the performance of the SOLACTIVE SOFI US 500 GROWTH INDEX .
The Solactive SoFi US 500 Growth Index follows a rules-based methodology that tracks the performance of 500 of the largest U.S.-listed companies weighted based on a proprietary mix of their market capitalization and fundamental factors.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for SFY are 0%, which makes it the least expensive product in the space.
It has a 12-month trailing dividend yield of 1.54%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For SFY, it has heaviest allocation in the Information Technology sector --about 26.70% of the portfolio --while Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Amazon Com Inc (AMZN - Free Report) accounts for about 6.47% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 29.56% of SFY's total assets under management.
Performance and Risk
Year-to-date, the SoFi Select 500 ETF has added roughly 13.74% so far, and is up about 11.17% over the last 12 months (as of 11/02/2023). SFY has traded between $13.06 and $16.24 in this past 52-week period.
The fund has a beta of 1.02 and standard deviation of 18.83% for the trailing three-year period. With about 503 holdings, it effectively diversifies company-specific risk.
Alternatives
SoFi Select 500 ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Growth ETF (VUG - Free Report) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ - Free Report) tracks NASDAQ-100 Index. Vanguard Growth ETF has $89.10 billion in assets, Invesco QQQ has $197.79 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.