SoFi Wealth invests your money in Exchange Traded Funds. ETFs are a type of mutual fund. They are an easy, low-cost way to invest in a diversified portfolio of stocks and bonds.
We build portfolios from a broad mix of ETFs that follow over 20 indexes. These indexes represent the historic performance of groups of investments, or asset classes. They include things like US stocks, international stocks, high yield bonds, real estate, short-term treasury bonds, and the stock markets of many countries and regions.
SoFi’s cumulative returns compared to industry benchmark.Updated on 07/14/2017
|||6 Month Return6MO||1 Year Return1YR||3 Year Return3YR||5 Year Return5YR|
The performance information presented in charts or tables presented above represent ‘backtested’ performance based on combined simulated index data and actual Exchange Traded Fund (ETF) results from September 30th, 2003 to the period ending date shown, using the strategy of buy and hold, with dividend reinvestment, and rebalancing the portfolios on the last day of each month. This presentation is intended to illustrate the principle of Asset Allocation and the impact of fees on performance over time and was constructed with the benefit of hindsight, which does not account for retrospective investment manager decision making. Actual results may significantly differ from the backtested returns being presented.
SoFi Indices are comprised of the total return on each of the ETFs used and are weighted to mirror the current asset allocation of each stated SoFi Wealth model portfolio. The expense ratio for underlying holdings was estimated using a weighted average of the ratios for the ETF’s utilized in the SoFi Wealth model portfolios as of March, 2017. Management fees assumed the current SoFi Wealth annual fee for assets greater than$10k of 0.25%
Benchmarks are constructed using combinations of MSCI All Country World Index (ACWI) and the Bloomberg Barclays Global Aggregate (Dollar Hedged) Total Return index, blended to represent the weighting of equity and fixed income allocations maintained in the associated SoFi Index. Management fees assumed an “average mutual fund fee” of .79%, as expressed in the Morningstar 2015 Fee Study.
More on the assumptions and methodologies used to construct backtested performance found here.
Check out our investment glossary to learn more about investment terms.
We help you set goals and map out a plan to achieve them.
SoFi takes a goal-based approach to wealth management. Our first step is to look at your investment goals and help you map out a plan to achieve them. We’ll recommend an investment portfolio based on your age, income, and the amount of investable assets you currently have. Not into taking our word for it? You can always adjust your risk level and make your own selection. The risk simulation in our goal planner helps you to understand how both risk and the amount you invest can change the probability of reaching that goal. Usually, increasing your savings rate and extending the time until you need the money for your goal will have a greater impact on your odds of success than taking more risk.
We reduce some of the risk of your portfolio by investing in thousands of assets.
Diversification is spreading your investment over many different asset classes, business sectors, industries, companies, and even countries. Investing has many risks, but most risks do not impact all asset classes in the same way. Diversifying your assets is generally less risky than concentrating your money in one asset or asset class. SoFi Wealth uses Modern Portfolio Theory, the Nobel Prize-winning idea that values systematic diversification. Basically, instead of banking on a hot new stock to make you a bunch of money, modern portfolio theory works to invest in statistically optimized mix of stocks, bonds, and potentially other investments, like gold or real estate. Instead of choosing a few companies to invest in, we use ETFs to spread your investment over thousands of individual assets. Essentially, this reduces the impact on your wealth of any one firm going bad. It’s definitely not risk-free, but if you had a finance professor, it’s the approach they would probably recommend.
We actively manage passive assets to give you the best of both worlds.
There are many ways to build a portfolio of stocks and bonds. Most approaches fall into one of two categories: passive or active. Passive investing picks a benchmark index and mirrors it. An ETF made up of all the stocks in the S&P 500 index is an example. Active investing involves making decisions that differ from the benchmark index. A mutual fund that picks what it thinks are the 10 best stocks from anywhere in the world, or one that might overweight Europe at the expense of Japan are examples of active investing. SoFi actively curates a portfolio of passively managed index ETFs. First, we have a team of investment professionals who look at hundreds of global stock and bond indexes, and measure both their historical volatility (variance) and how each moves relative to the others (covariance). Then we add our performance assumptions for the next twelve months, broken out by dividends, coupons, and price appreciation, as each has potentially different tax treatment. We monitor markets and data and adjust portfolios when necessary, and we publish our work weekly to help provide transparency on our portfolio selections. We believe this approach gives you the advantages of active management, the broad diversification of index funds, and the low fees of index ETFs. To us, patience and consistency are key. Our portfolios are designed to keep you invested for the long-term so you are more likely to reach your goals. Ultimately, we believe this approach will deliver better returns over the long run than holding the same mix of indexes with no adjustments for changing economic conditions. We do not receive fees or compensation of any kind from any fund or family of funds. We pick the funds we think are best, purely on their merits.
We automatically rebalance your investments about once a month.
Rebalancing means adjusting the mix of assets in your portfolio to keep it in line with the target portfolio you chose based on your risk-tolerance. Say, for example, your preferred portfolio had 70% stocks and 30% bonds, and the stocks went up over time so they now make up 80% of the value of your portfolio. Rebalancing means selling some of the stocks and buying more bonds until you are back to the 70/30 split that you chose. Regular rebalancing tends to help you buy low and sell high because you’re selling some of the assets that have increased in value and buying those that have gone down or increased less. This approach helps you avoid making poor financial decisions because of emotions. Many investors tend to hold on to securities too long if they go up and sell in a panic if they go down. Our more disciplined approach tends to help prevent selling low and buying into market highs. The best part? SoFi rebalances your portfolio as needed so you don’t have to worry about it. Whenever new cash comes into your account, either a deposit or a distribution from one of the ETFs, we apply that to the asset class or classes that need it most. Since there are monthly distributions from the bond funds, most accounts are adjusted at least once a month. If any asset class in an account drifts more than five percentage points off the target, we rebalance the portfolio.
As the CEO, Chairman and co-founder of SoFi, Mike Cagney leads corporate strategy and development at SoFi—bringing decades of experience in the financial industry to his leadership of the company. He’s held a Senior Vice President role at Wells Fargo, where he was head trader for the proprietary trading and financial products group. Mike is also co-founder and a managing member of Cabezon Investment Group, a global macro hedge fund, in addition to serving as a non-executive Chairman of ReFlow. Before Cabezon, Mike founded, was CEO and then Vice Chairman and Chief Architect, of Finaplex, a leader in wealth management software that was sold to Broadridge (NYSE: BR).
While overseeing SoFi’s overall direction, Mike makes a daily point to interact with SoFi’s member base, now more than 200,000 members. In addition to reading and responding to member feedback, he hosts SoFi member dinners at his San Francisco home to better know our customers and understand their financial goals.
Mike holds an M.S., Management degree from the Stanford Graduate School of Business, where he was a Sloan Fellow. He also holds a MS in applied economics from UC Santa Cruz.
Michael brings over 40 years of experience in investment management, banking, and economics. He currently serves as Chief Economist for Cabezon Investment Group, a global macro hedge fund, as well as an advisor to several national governments and central banks. Prior to Cabezon, he was an economist at the US Federal Reserve, the IMF, and Deutsche Bank. Michael holds a Ph.D in Economics from Penn State University. He also holds an MA from the University of Delaware and a BS from Duquesne University.
John Gardner, CFA, is the General Manager of Wealth at SoFi, where he’s responsible for the development for SoFi’s investment, insurance and advisory services platforms. Prior to SoFi, John was a Co-founder & CFO of LearnVest, a subscription based financial planning platform acquired by Northwestern Mutual in 2015. He also was a co-founder of Cabezon Investment Group, a Global Macro Hedge fund.
John graduated with a Bachelor of Science in Finance and Marketing from Lehigh University.
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