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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.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Sofi, SFY has amassed assets over $767.97 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 this ETF are 0%, making it the least expensive product in the space.
The fund has a 12-month trailing dividend yield of 1.28%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Information Technology sector - about 28.10% of the portfolio. Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Amazon.com Inc (AMZN - Free Report) accounts for about 7.54% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Apple Inc (AAPL - Free Report) .
SFY's top 10 holdings account for about 29.65% of its total assets under management.
Performance and Risk
The ETF has added roughly 9.50% and it's up approximately 30.65% so far this year and in the past one year (as of 05/07/2024), respectively. SFY has traded between $14.35 and $18.63 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 18.61% 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 $121.07 billion in assets, Invesco QQQ has $257.99 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.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Sofi, SFY has amassed assets over $767.97 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 this ETF are 0%, making it the least expensive product in the space.
The fund has a 12-month trailing dividend yield of 1.28%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Information Technology sector - about 28.10% of the portfolio. Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Amazon.com Inc (AMZN - Free Report) accounts for about 7.54% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Apple Inc (AAPL - Free Report) .
SFY's top 10 holdings account for about 29.65% of its total assets under management.
Performance and Risk
The ETF has added roughly 9.50% and it's up approximately 30.65% so far this year and in the past one year (as of 05/07/2024), respectively. SFY has traded between $14.35 and $18.63 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 18.61% 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 $121.07 billion in assets, Invesco QQQ has $257.99 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.