Is SoFi Select 500 ETF (SFY) a Strong ETF Right Now?

The SoFi Select 500 ETF (SFY) 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?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

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.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

Because the fund has amassed over $473.56 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. SFY is managed by Sofi. This particular fund, before fees and expenses, 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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

With one of the least expensive products in the space, this ETF has annual operating expenses of 0.05%.

The fund has a 12-month trailing dividend yield of 0.47%.

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 37% of the portfolio --while Financials and Healthcare round out the top three.

When you look at individual holdings, Nvidia Corp (NVDA) accounts for about 11.53% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN).

The top 10 holdings account for about 40.6% of total assets under management.

Performance and Risk

The ETF has added roughly 0.74% and was up about 16.26% so far this year and in the past one year (as of 05/23/2025), respectively. SFY has traded between $90.76 and $114.95 during this last 52-week period.

The ETF has a beta of 1.06 and standard deviation of 19.88% for the trailing three-year period. With about 503 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) tracks CRSP U.S. Large Cap Growth Index and the Invesco QQQ (QQQ) tracks NASDAQ-100 Index. Vanguard Growth ETF has $162.78 billion in assets, Invesco QQQ has $325.41 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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This article originally published on Zacks Investment Research (zacks.com).

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