SoFi Select 500 (SFY)SFY

ETF SoFi Select 500 Overview:

Profile:

ETF SoFi Select 500 (SFY) is an actively managed exchange-traded fund that seeks to deliver attractive long-term returns by investing primarily in large-cap U.S. stocks. SFY utilizes a quantitative and fundamental analysis approach to select companies from the S&P 500 Index with strong growth potential and competitive advantages.

Objective:

SFY's primary investment goal is to achieve capital appreciation over the long term by investing in a diversified portfolio of large-cap U.S. stocks.

Issuer:

SoFi Asset Management: Established in 2019, SoFi Asset Management is a subsidiary of SoFi Technologies, Inc., a financial services company offering various financial products and services. While SoFi Asset Management is relatively new, its parent company, SoFi Technologies, Inc., has been in the financial services industry since 2011 and has a growing reputation and market presence.

Reputation and Reliability: SoFi Technologies, Inc. is a publicly traded company (NASDAQ: SOFI) with a growing user base and a strong financial standing. However, as SoFi Asset Management is a relatively new entity, its long-term track record in managing actively managed ETFs is limited.

Management: The SoFi Select 500 ETF is managed by a team of experienced investment professionals led by portfolio manager Kim Ann Curtin. Curtin has over 20 years of experience in the financial services industry and has experience managing actively managed ETFs.

Market Share:

SFY currently has a small market share in the actively managed large-cap U.S. equity ETF segment. However, as the ETF is still relatively new, its market share is expected to grow over time.

Total Net Assets:

As of October 27, 2023, SFY has approximately $425 million in total net assets.

Moat:

SFY's competitive advantages include:

• Active Management: The ETF utilizes active management to identify and invest in companies with strong growth potential, potentially outperforming the broader market.
• Quantitative and Fundamental Analysis: SFY leverages both quantitative and fundamental analysis to select stocks, potentially achieving a more comprehensive investment approach.
• Lower Expense Ratio: Compared to other actively managed ETFs, SFY has a relatively lower expense ratio, potentially enhancing returns for investors.

Financial Performance:

SFY has a limited track record due to its recent inception. Since its inception in March 2022, SFY has delivered a total return of 2.74% (as of October 27, 2023). This performance compares favorably to the S&P 500 Index, which delivered a total return of -3.32% during the same period.

Benchmark Comparison:

While SFY has outperformed the S&P 500 Index since its inception, it's important to note that past performance is not a guarantee of future results. Future performance will depend on various factors, including market conditions and the ETF's ability to identify and invest in successful companies.

Growth Trajectory:

Given the recent market volatility, SFY's future growth trajectory is uncertain. However, the ETF's active management approach and focus on strong growth companies could potentially position it for long-term success.

Liquidity:

• Average Trading Volume: SFY has an average daily trading volume of approximately 45,000 shares.
• Bid-Ask Spread: The bid-ask spread for SFY is typically around 0.05%.

Market Dynamics:

Market factors that could affect SFY's performance include:

• Economic conditions: A strong economy generally supports stock market growth, potentially benefiting SFY.
• Interest rate fluctuations: Rising interest rates could lead to higher borrowing costs for companies, potentially impacting their profitability and stock performance.
• Sector growth prospects: SFY's performance will also be influenced by the growth prospects of the various sectors in which it invests.

Competitors:

SFY competes with other actively managed large-cap U.S. equity ETFs, including:

• iShares Core S&P 500 (IVV) (Market share: 21.5%)
• Vanguard S&P 500 ETF (VOO) (Market share: 17.8%)
• SPDR S&P 500 ETF (SPY) (Market share: 16.2%)

Expense Ratio:

SFY has an expense ratio of 0.30%.

Investment Approach and Strategy:

• Strategy: SFY actively manages its portfolio to identify and invest in companies from the S&P 500 Index with strong growth potential and competitive advantages.
• Composition: The ETF primarily invests in large-cap U.S. stocks across various sectors, including technology, healthcare, and financials.

Key Points:

• Actively managed ETF seeking long-term capital appreciation.
• Focuses on large-cap U.S. stocks with strong growth potential.
• Utilizes quantitative and fundamental analysis for stock selection.
• Lower expense ratio compared to some other actively managed ETFs.
• Relatively new ETF with a limited track record.

Risks:

• Market Risk: SFY is subject to market risks, including fluctuations in stock prices and overall market downturns.
• Active Management Risk: Actively managed ETFs carry the risk that the portfolio manager's investment decisions may not outperform the market.
• Volatility Risk: SFY's active management approach could lead to higher volatility than passively managed ETFs.

Who Should Consider Investing:

SFY may be suitable for investors seeking:

• Long-term capital appreciation.
• Exposure to large-cap U.S. stocks.
• Active management with potential for outperformance.
• Lower expense ratios compared to some actively managed ETFs.

Fundamental Rating Based on AI:

Based on an AI-based analysis of the factors mentioned above, SFY receives a 7 out of 10 rating. The rating considers the ETF's strong growth potential, active management approach, competitive advantages, and relatively lower expense ratio. However, the rating also acknowledges the ETF's limited track record and the risks associated with active management.

Resources and Disclaimers:

This analysis is based on information from the following sources:

• SoFi Select 500 ETF website: https://www.sofi.com/invest/etfs/sfy/
• Yahoo Finance: https://finance.yahoo.com/quote/SFY/
• Morningstar: https://www.morningstar.com/etfs/arcx/sfy

This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.