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Is SoFi Select 500 ETF (SFY) a Strong ETF Right Now?
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The SoFi Select 500 ETF (SFY - Free Report) made its debut on 04/11/2019, and is a smart beta exchange traded fund that provides 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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Sofi, and has been able to amass over $845.37 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Growth. SFY seeks to match the performance of the SOLACTIVE SOFI US 500 GROWTH INDEX before fees and expenses.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0% for this ETF, which makes it the least expensive product in the space.
It's 12-month trailing dividend yield comes in at 1.10%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
SFY's heaviest allocation is in the Information Technology sector, which is about 27.50% of the portfolio. Its Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 15.53% of total assets, followed by Amazon.com Inc (AMZN - Free Report) and Microsoft Corp (MSFT - Free Report) .
The top 10 holdings account for about 43.58% of total assets under management.
Performance and Risk
Year-to-date, the SoFi Select 500 ETF has added about 21.10% so far, and it's up approximately 32.87% over the last 12 months (as of 07/10/2024). SFY has traded between $14.59 and $20.41 in this past 52-week period.
SFY has a beta of 1.03 and standard deviation of 18.50% for the trailing three-year period. With about 502 holdings, it effectively diversifies company-specific risk.
Alternatives
SoFi Select 500 ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
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 $138.87 billion in assets, Invesco QQQ has $301.19 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?
The SoFi Select 500 ETF (SFY - Free Report) made its debut on 04/11/2019, and is a smart beta exchange traded fund that provides 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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Sofi, and has been able to amass over $845.37 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Growth. SFY seeks to match the performance of the SOLACTIVE SOFI US 500 GROWTH INDEX before fees and expenses.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0% for this ETF, which makes it the least expensive product in the space.
It's 12-month trailing dividend yield comes in at 1.10%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
SFY's heaviest allocation is in the Information Technology sector, which is about 27.50% of the portfolio. Its Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA - Free Report) accounts for about 15.53% of total assets, followed by Amazon.com Inc (AMZN - Free Report) and Microsoft Corp (MSFT - Free Report) .
The top 10 holdings account for about 43.58% of total assets under management.
Performance and Risk
Year-to-date, the SoFi Select 500 ETF has added about 21.10% so far, and it's up approximately 32.87% over the last 12 months (as of 07/10/2024). SFY has traded between $14.59 and $20.41 in this past 52-week period.
SFY has a beta of 1.03 and standard deviation of 18.50% for the trailing three-year period. With about 502 holdings, it effectively diversifies company-specific risk.
Alternatives
SoFi Select 500 ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
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 $138.87 billion in assets, Invesco QQQ has $301.19 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.