US-based platform Social Finance is the latest competitor to pave the path for a zero-fee ETF, according to a recent filing to the Securities and Exchange Commission.
SoFi offers a range of products for borrowing, saving, refinancing and investing. The company’s investment options already include active and auto investment products with zero fees. Now moving over to the passive side of the fence, SoFi hopes to include a range of ETFs in its zero-fee offering once given approval by the SEC.
The range of zero-fee ETFs will be the first to enter the market, with ETF giants Vanguard and BlackRock offering fees as low as 3 or 4 bps as well as fidelity expanding its commission free platform.
The ETFs set to launch include SoFi 500 ETF (SFY), SoFi Next 500 ETF (SFYX), SoFi 50 ETF (SFYF) and SoFi Gig Economy ETF (GIGE). A 0.19% management fee allocated to each fund is to be waved until at least 27 March 2020.
SoFi has partnered with German-based index provider Solactive for the development of the indices which the ETFs will be tracking. SFY will track the Solactive SoFi US 500 Growth Index and is comprised of the 500 largest US listed companies, weighted according to their market cap which range from large to mid cap.
SFYX will track the Solactive SoFi US Next 500 Growth Index and is comprised of the next 500 after those from SFY. Tracking the Solactive SoFi US 50 Growth Index, SFYF decreases the exposure offered by SFY as it is comprised with only the 50 largest companies in the US and is equally weighted.
Finally, the actively managed GIGE, will be advised by Toroso Investments. The advisor constructs the fund with companies which fall under the category “gig economy”. Essentially this means it will include companies which support and benefit from independent contractors or individual employees.