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), a passively managed exchange traded fund launched on 04/11/2019.

The fund is sponsored by Sofi. It has amassed assets over $695.44 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

Large cap companies usually have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile 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. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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 1.32%.

Sector Exposure and Top Holdings

ETFs offer a 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.

This ETF has heaviest allocation to the Information Technology sector--about 27.60% of the portfolio. Consumer Discretionary and Financials round out the top three.

Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 7.54% of total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).

The top 10 holdings account for about 29.65% 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 return is roughly 6.08% so far this year and was up about 28.31% in the last one year (as of 04/26/2024). In the past 52-week period, it has traded between $14.11 and $18.63.

The ETF has a beta of 1.02 and standard deviation of 18.50% 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 an outstanding 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) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $113.40 billion in assets, Invesco QQQ has $248.24 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.

Get it free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SoFi Select 500 ETF (SFY): ETF Research Reports

Amazon.com, Inc. (AMZN) : Free Stock Analysis Report

Apple Inc. (AAPL) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

Invesco QQQ (QQQ): ETF Research Reports

Vanguard Growth ETF (VUG): ETF Research Reports

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.