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Proprietary Data Insights Top Financial Pro Stock Searches This Month
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Does This Social ETF Deserve A Place In Your Portfolio? |
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At The Juice, we like digging deep into all types of ETFs, comparing them to the benchmarks we most strongly suggest for long-term investors. We last did this with a couple of WisdomTree funds in 2 ETFs For Growth And AI Exposure. Check out that installment after you read today’s Juice. In the above-linked story, we concluded: The ETF world is packed. In all honesty, you should probably stay away from 98% of the tickers out there. Especially if they get too cute. This said, there are some The Juice thinks are worth your time. Sometimes for potential investment. Sometimes for education purposes. Sometimes both. While we tend to rally around a core of low-cost, broad market ETFs, there are times when we actually like an alternative ETF. When we came across the SoFi Social 50 ETF (SFYF), we figured it would be another fund to throw in the too cute pile. However, upon further inspection, maybe we were wrong. For starters, SFYF’s expense ratio is a reasonable 0.29%. This makes it worth a look. Anything higher than 0.50% might disqualify it instantly. Here’s how SoFi constructs the ETF, pulling directly from the company’s marketing:
So, essentially, a wisdom of the crowd approach. As for holdings, as it turns out, the 50 stocks check many of the boxes in terms of the categories The Juice advocates for long-term investing:
Because it’s weighted by popularity (using the amount of money SoFi investors have in each stock as the measure), the weighting doesn’t go too far in the speculative direction. As of mid-August, SFYF’s top ten names (with weighting) are:
The top ten account for more than 56% of the fund, relegating names such as BYND and AMC to considerably less than 1.0% concentrations. As for performance, SFYF has held up well against, if not performed much better than the SPDR S&P 500 ETF (SPY) and Invesco QQQ Trust ETF (QQQ):
Expand the time horizon and you get similar impressive results. Of course, SFYF has its share of poor performers, but so does SPY and QQQ. And the beauty of SFYF’s approach is that if the crowd turns sour on a stock, it gets thrown out of the rotation quickly.
The Bottom Line: While we’re not saying you should put your entire retirement fund into the SoFi Social 50 ETF, we are saying that, as cute ETFs go, this is one of the better ones we have come across. It pleasantly surprised us. There’s something to be said for pooling the intelligence and stock picks of investors. Turns out it can create a portfolio with meaningful variety, if not decent or better diversification. |
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