SoFi Digs Deeper Into Thematic ETF Space

August 09, 2022

SoFi Technologies Inc., a personal finance provider that entered the ETF market in 2019, is making some major changes to its lineup, including the launch of a new ETF. The SoFi Web 3 ETF (TWEB) listed on Tuesday on the Nasdaq with an expense ratio of 0.59%. 

The fund tracks an index that aims to represent the third generation of companies that provide internet services for websites and applications, the prospectus says, noting that the core concepts driving this iteration are expected to be decentralization, openness and greater user utility. As such, it will focus on stocks associated with four key themes: nonfungible tokens and tokenization, blockchain technology, the metaverse, and big data and artificial intelligence.  

The SoFi Solactive ARTIS Web 3.0 Index includes 40 securities selected at the global level based on scores on their relevance to each theme determined through natural language processing. The top 10 scoring stocks for each theme are selected for inclusion in the index and equal weighted within their thematic group. 

An Acquired Fund 

At the same time, SoFi acquired the iClima Distributed Smart Energy ETF (SHFT) from issuer iClima, which closed its only other ETF last month. SoFi rebranded SHFT as the SoFi Smart Energy ETF (ENRG), which lists on the NYSE Arca and, like TWEB, comes with an expense ratio of 0.59%.  

ENRG tracks an index of companies that operate in the distributed energy resources space. DER generally focuses on localized power sources and distribution such as solar cells or turbines. The fund’s underlying index also includes screens removing companies based on ESG criteria such as involvement in fossil fuels, nonconventional weapons or nuclear energy, according to its prospectus. 

A press release from SoFi notes that a survey the firm conducted found that 73% of its members wanted a cleantech ETF.  

GIGE Rebranded 

SoFi also rebranded its $10 million actively managed SoFi Gig Economy ETF (GIGE) as the SoFi Be Your Own Boss ETF (BYOB), a move that the company said better reflects “the fund’s goal of investing in companies that embody the future of work.” Certainly, the term “gig economy” has taken on some negative connotations in recent years.  

The new additions bring the total number of ETFs offered by SoFi to eight, and signal a deeper shift into the thematic ETF space, an area where there are more opportunities for smaller, newer issuers. SoFi’s platform also has a customer base that tilts toward younger, tech-savvy professionals who may find such products more appealing.  

 

Contact Heather Bell at [email protected] 

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