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Should SoFi Select 500 ETF (SFY) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the SoFi Select 500 ETF (SFY - Free Report) , a passively managed exchange traded fund launched on 04/11/2019.
The fund is sponsored by Sofi. It has amassed assets over $586.18 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.37%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 27.90% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Amazon Com Inc (AMZN - Free Report) accounts for about 6.47% of total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
The top 10 holdings account for about 29.56% of total assets under management.
Performance and Risk
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.
The ETF has gained about 27.43% so far this year and it's up approximately 27.62% in the last one year (as of 12/21/2023). In the past 52-week period, it has traded between $13.06 and $17.08.
The ETF has a beta of 1.02 and standard deviation of 18.78% for the trailing three-year period. With about 503 holdings, it effectively diversifies company-specific risk.
Alternatives
SoFi Select 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SFY is a great option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $102.63 billion in assets, Invesco QQQ has $226.61 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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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Should SoFi Select 500 ETF (SFY) Be on Your Investing Radar?
If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the SoFi Select 500 ETF (SFY - Free Report) , a passively managed exchange traded fund launched on 04/11/2019.
The fund is sponsored by Sofi. It has amassed assets over $586.18 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.37%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 27.90% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Amazon Com Inc (AMZN - Free Report) accounts for about 6.47% of total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
The top 10 holdings account for about 29.56% of total assets under management.
Performance and Risk
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.
The ETF has gained about 27.43% so far this year and it's up approximately 27.62% in the last one year (as of 12/21/2023). In the past 52-week period, it has traded between $13.06 and $17.08.
The ETF has a beta of 1.02 and standard deviation of 18.78% for the trailing three-year period. With about 503 holdings, it effectively diversifies company-specific risk.
Alternatives
SoFi Select 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SFY is a great option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $102.63 billion in assets, Invesco QQQ has $226.61 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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.