Solactive has launched two indices labeled Solactive SoFi US 500 Growth Index and Solactive SoFi US Next 500 Growth Index, both serving as the underlying for two ETFs featuring a zero-fee waiver approach: the SoFi Select 500 ETF and the SoFi Next 500 ETF.Both funds are released by disruptive online personal finance company SoFi. These funds allow investors widespread access to the US broad market and will be free of charge through at least 30 June, 2020.
The indices underlying the ETFs are based on the Solactive US Broad Market Index, which includes equity securities of approximately 3,000 of the largest US companies. While the Solactive SoFi US 500 Growth Index tracks the 500 largest constituents measured by market capitalisation of its umbrella-index, its sibling, the Solactive SoFi US Next 500 Growth Index, contains the 501st through the 1,000th largest US companies, effectively focusing on 500 mid-cap sized players.
Furthermore, the weighting of each index constituent rests upon three fundamental factors that Solactive uses to define an overall Growth Score. It takes into account each company’s sales and net income growth over the previous 12 months as well as a 12-month forward looking net income growth. Solactive combines each of the three factors equally to derive an overall growth score, which establishes the framework for each constituent’s individual weighting. Utilising the individual stock’s market capitalisation as the starting point, the stock-specific Growth Score over or underweights the index members relative to their initial market capitalisation weight.
Timo Pfeiffer, Head of Research at Solactive, says: “We are proud to find in SoFi another disruptive player that shares Solactive’s spirit and audacity to challenge the status quo. As foreseen in our blog last year, we have spotted the trend towards zero fees, which finally becomes a reality. SoFi’s advancement in technology-based investing and brokerage mirrors Solactive’s drive to utilise IT infrastructure to effectively add value for our clients. We are excited to be part of SoFi’s first steps into the ETF world.”
Anthony Noto, CEO of SoFi, says: “As a new player in the ETF space, we extensively researched the best partners and all signs pointed to Solactive. We’re thrilled to be partnering with Solactive to bring these two funds to market.”
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