Online personal finance and investment company SoFi has launched two new ETFs in the US: SoFi 50 ETF (SFYF US), a large-cap growth fund; and SoFi Gig Economy ETF (GIGE US), an actively managed thematic ETF targeting the gig economy.
SoFi CEO Anthony Noto.
“Our members are excited by high-growth and gig economy companies because these companies are in many cases part of their lives,” said SoFi CEO Anthony Noto.
“We’re giving our members a way to get started investing by buying what they know and investing in themselves.”
The SoFi 50 ETF is linked to the Solactive SoFi US 50 Growth Index. The index captures the performance of 50 of the 1,000 largest US-listed companies that have the highest growth scores based on top-line revenue growth, net income growth, and forward-looking consensus estimates of net income growth. Each of the three factors contributes equally to a stock’s growth score.
To limit turnover, the index includes a 20% buffer rule whereby current constituents must see their growth score fall out of the top 60 to be removed at review. Stocks are equally weighted within the index which is reconstituted and rebalanced semi-annually in May and November.
The fund is listed on NYSE Arca and comes with an expense ratio of 0.29%.
The SoFi Gig Economy ETF, sub-advised by Toroso Investments, seeks long-term capital appreciation by investing in gig-oriented companies globally.
According to the fund’s prospectus, eligible companies include those that embrace, support, or benefit from a workforce where individual employees create their own freelance business by leveraging technology platforms that enable them to offer their services directly to retail and commercial customers.
The fund invests in five categories of gig-related businesses. Firms that directly facilitate the gig economy, including auction sites, web-based stores, and app-based platforms make up the primary tier and account for 30%-60% of the fund’s weight.
At the other end of the scale, unrelated companies expected to benefit from the growth of gig economy businesses account for a maximum of 10% of the total weight. Companies providing support services to the gig economy make up the remaining three tiers and account for the remainder of the fund’s exposure.
According to SoFi, the fund may include IPO firms within 31 days of their initial flotation, as opposed to traditional passive funds that typically wait 60 to 90 days to include new IPOs.
The ETF is listed on Nasdaq Exchange and comes with an expense ratio of 0.59%.
The funds come to market a little over a month since the introduction of SoFi’s debut ETFs, the SoFi Select 500 ETF (SFY US) and SoFi Next 500 ETF (SFYX US). These ETFs provide growth-tilted exposure to the large- and mid-cap segments of the US equity market, respectively.
According to SoFI, the funds are designed to cater specifically to its existing customer base which tends to be skewed towards younger investors with high income and robust credit profiles.