SFY - SFY: Moderately Aggressive Large-Cap Growth ETF Worth Watching

2024-05-24 15:12:04 ET

Summary

• SFY has delivered solid returns since May 2019 and has proven to be a solid choice for moderately aggressive growth investors. Importantly, its 0.19% expense ratio is currently waived.
• Its Index recently reconstituted, and Nvidia now comprises 13% of SFY. This high single-stock risk is the result of a process that only considers one year's worth of growth data.
• Still, SFY now has a superior combination of value and growth compared to its large-cap growth peers. As I will demonstrate, it ranks average or better on 9/10 key factors.
• Growth stocks might have elevated risk, but SFY is one to keep on your watchlist. It features high growth at a reasonable price, and I would not be surprised if it outperforms SPY moving forward.

Investment Thesis

I last covered the SoFi Select 500 ETF ( SFY ) on January 18, 2024, which I downgraded based on my perception that growth stocks were overvalued and how broad-based funds like the SPDR S&P 500 ETF Trust ( SPY ) were safer choices. Nevertheless, SFY has powered on, delivering a 12.55% total return through May 20, 2024, compared to 11.86% for SPY and 14.29% for the SPDR Portfolio S&P 500 Growth ETF ( SPYG )....

For further details see: