InvestGen Archives

Sep

2025

How to Trade ETFs: X Strategies for Retail Investors

How to Trade ETFs: A Guide for Retail Investors

By Brian O'Connell | Growing Wealth, invest, Investing | Comments Off

Table of Contents

What Is an ETF (Exchange-Traded Fund)?
4 Reasons to Consider Trading ETFs
What Are the Risks of Trading ETFs?
How to Trade ETFs
FAQ

Trading ETFs is, in many ways, similar to trading stocks or other securities, and can be done on most stock-trading platforms or brokerages. And while conventional wisdom suggests investors are limited in what they can do with an exchange-traded fund (ETF), an investor can likely find a fund that fits their portfolio.

But investors have different goals and strategies, and that may include trading or otherwise buying and selling ETFs frequently. Trading ETFs is fairly simple, though, and investors would do well to know how to trade ETFs.

Key Points

• ETF trading is similar to stock trading, and is available on various platforms.

• Market orders execute at the best available current prices, while limit orders execute at specific prices or better.

• ETFs offer liquidity and a wide range of investment options.

• Trading strategies may be based on technical and fundamental analysis.

• Risks are comparable to stocks, but the liquidity of ETFs may help investors manage downside risks.

What Is an ETF (Exchange-Traded Fund)?

An exchange-traded fund, or ETF, is a popular investment vehicle that enables investors to buy a group of stocks in one bundle, thus promoting investment diversity and efficiency. They’re widely available, usually through major investment fund companies.

ETFs aren’t mutual funds, although they originate from the same fund investment family. One of the primary differences between the two is that mutual funds are usually more expensive than exchange traded funds, since mutual funds are typically actively managed while ETFs are usually passively managed.

Another benefit of ETFs is that whereas mutual funds can only be traded after the end of the market day, ETFs can be traded during open market sessions at any point in the day. ETFs have become wildly popular, too, over the years.

💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.

Different Types of ETFs

ETFs come in a variety of different types, including the following:

• Stock ETFs: This type of ETF is composed of various equity (stock) investments.

• Bond ETFs: Bond ETFs hold different types of bond vehicles, like U.S. Treasury bonds, utility bonds, and municipal bonds.

• Commodities: Commodity ETFs are popular with investors who want exposure to gold, silver, copper, oil, and other common global commodities.

• International ETFs: Global-based ETFs often include country-specific and location-specific funds, like an Asia ETF or a Europe ETF, which are made up of companies based in the country featured in the ETF.

• Emerging market ETFs: This type of ETF is composed of stocks from up-and-coming global economies like Indonesia and Argentina.

• Sector ETF: A sector ETF is focused on an economic sector, like manufacturing, health care, climate change/green companies, and semiconductors, among others.

Recommended: Tips on How to Choose The Right ETF

4 Reasons to Consider Trading ETFs

Trading ETFs offers the same advantages (and risks) associated with trading common stocks. These features and benefits are at the top of the list.

1. ETFs Can Provide Liquidity

In a multi-trillion dollar market, there is likely no shortage of investors looking to buy and sell ETFs. By and large, the bigger the market, the more liquidity it provides, and the easier it is to move in and out of positions.

2. There are Different Investment Options

With ETFs widely available in categories like stocks, bonds, commodities, and more recently, green industries and others, ETF traders have plenty of investment options.

3. ETFs Offer Portfolio Diversity

Investment specialists often extol the virtue of a diverse portfolio, i.e., one made up of both conservative and more aggressive investments that can balance one another and help reduce risk. With so many classes of ETFs available, it’s relatively easy to build an ETF trading portfolio that has different asset classes included.

4. ETFs Are Relatively Inexpensive to Trade

Exchange-traded funds are typically inexpensive to buy, with some brokerage platforms may offer commission-free ETFs.

What Are the Risks of Trading ETFs?

The main risk associated with trading ETFs is the same as with trading stocks, as you could lose money. While shedding cash is always a threat when trading any security, the liquidity associated with exchange-traded funds makes it relatively easy to sell out of a position if needed. A candid conversation with a financial advisor may help investors deal with ETF investment trading risks.

How to Trade ETFs

Just as you can trade stocks, you can trade ETFs, too, by taking these steps.

▶️

Video: How to Invest in ETFs with SoFi
Learn the basics in under 2 minutes.
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Step 1. Choose a Trading Platform

Traditionally, investors trade stocks through a brokerage house or more recently via an online broker. As with most things in life, it’s generally a good idea to look around, kick some proverbial tires, and choose a broker with the best ETF trading services for you.

Investors can choose from different categories of ETF trading accounts, ranging from standard trading accounts with basic trading services to retirement accounts, specialty accounts, or managed portfolio accounts that offer portfolios managed by professional money managers.

Step 2. Select an ETF Trading Strategy

The path to successful ETF trading flows through good, sound portfolio construction and management.

That starts with leveraging two forms of investment strategy — technical or fundamental analysis.

• Technical analysis: This investment strategy leverages statistical trading data that can help predict market flows and make prudent ETF trading decisions. Technical analysis uses data in the form of asset prices, trading volume, and past performance to measure the potential effectiveness of a particular ETF.

• Fundamental analysis: This type of portfolio analysis takes a broader look at an ETF, based upon economic, market, and if necessary, sector conditions.

Fundamental analysis and technical analysis can be merged to build a trading consensus, typically with the help of an experienced money manager.

Any trading strategy used to build ETF assets will also depend on the investor’s unique investment needs and goals, and will likely focus on specific ETF portfolio diversification and management. For example, a retiree may trade more bond ETFs to help preserve capital, while a young millennial may engage in more stock-based ETF portfolio activity to help accumulate assets for the long haul.

Step 3. Make the Trade

Executing ETF trades is fairly straightforward for retail investors. It may be best to consider starting out with small positional trading, so that any rookie mistakes would be smaller ones, with fewer risks for one’s portfolio.

Here are two trading mechanisms that can get you up and running as an ETF trader:

• Market order. With market order trading, you buy or sell an ETF right now at the current share price, based on the bid and the ask — the price attached to a purchase or a sale of a security. A bid signifies the highest price another investor will pay for your ETF and the ask is the lowest price an ETF owner will sell fund shares. The difference between the two is known as the trading “spread.”

A word of caution on market trades. ETFs tend to have wider trading spreads than stocks, which could complicate you’re getting the ETF shares at the price you want. Share trading spreads of 10% are not uncommon when trading ETFs.

• Limit trade orders. An ETF limit order enables you to dictate terms on an ETF purchase or sale. With a limit order, you can set the top price you’ll pay for an ETF and the lowest price you’ll allow when selling an ETF.

For investors who have qualms about buying or selling an ETF at a fixed price, limit orders can be a viable option, as they allow the investor to set the terms for a trade and walk away from an ETF trade if those terms aren’t met.

💡 Quick Tip: Investment fees are assessed in different ways, including trading costs, account management fees, and possibly broker commissions. When you set up an investment account, be sure to get the exact breakdown of your “all-in costs” so you know what you’re paying.

The Takeaway

Historically, exchange traded funds have been used primarily as passive, “buy and sell investments.” But as asset trading grows more exotic in the digital age, trading ETFs has become increasingly popular. It’s fairly simple to trade ETFs, too, as most investors simply need access to an online trading platform or brokerage.

As with any investment, though, there are risks to consider. While ETFs can be a great starting point for many investors, they’re not entirely safe investments, and investors should do their research before buying shares of any specific ETF, as they would with any other type of security.

Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.

Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.¹

FAQ

What are some different types of ETFs?

Different types of ETFs include stock ETFs, bond ETFs, international ETFs, emerging market ETFs, and sector ETFs, among others.

What are some advantages of investing in ETFs?

While there may be drawbacks to consider, some of the advantages of investing in ETFs are that they’re relatively liquid investments, there are numerous different types and options available, they can help diversify a portfolio, and are relatively inexpensive.

Is an ETF the same as a mutual fund?

ETFs aren’t mutual funds, although they may be similar. The primary differences between the two is that mutual funds are usually more expensive than exchange traded funds. Mutual funds tend to be actively managed, too.

Photo credit: iStock/PeopleImages

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Mutual Funds (MFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or clicking the prospectus link on the fund's respective page at sofi.com. You may also contact customer service at: 1.855.456.7634. Please read the prospectus carefully prior to investing.Mutual Funds must be bought and sold at NAV (Net Asset Value); unless otherwise noted in the prospectus, trades are only done once per day after the markets close. Investment returns are subject to risk, include the risk of loss. Shares may be worth more or less their original value when redeemed. The diversification of a mutual fund will not protect against loss. A mutual fund may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by emailing customer service at [email protected]. Please read the prospectus carefully prior to investing.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

¹Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease. See full terms and conditions.
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOIN-Q325-123

Sep

2025

A close-up of a digital stock market display shows a fluctuating orange graph against a blue background.

Understanding Stock Market Corrections

By Samuel Becker | Growing Wealth, Investing | No Comments

Table of Contents

What Is a Market Correction?
The Nature and Frequency of Market Corrections
Navigating Through Market Corrections
Identifying Causes and Signs of Market Corrections
Coping With Market Corrections as an Investor
Real-World Examples of Market Corrections
FAQ

A stock market correction occurs when the market hits a new high, and then falls by at least 10%. A correction is similar to a dip or crash, but not as severe as a “bear market,” which is when the market sees a decline of 20% from a recent market peak.

Stock market corrections are normal and it’s important to be aware of why they happen and what you might consider doing the next time the market sees a correction.

Key Points

• A stock market correction is a 10% drop from a recent peak.

• Corrections are a normal part of the market cycle.

• Remaining calm and reassessing the portfolio is advised.

• Diversification and a long-term strategy can help manage volatility.

• Cashing out and buying more during downturns can be advantageous, though risky as well, as it’s a form of trying to time the market.

What Is a Market Correction?

A stock market correction happens when the market reaches a new interim high and then falls by 10%. Some other stock market terms for market downturns include dips or crashes, which may be temporary or quick drops in the market that don’t see the market fall past 10%.

Corrections vs Bear Markets

A bear market is a longer decline in the stock market, and refers to the market after it declines 20% or more from a previous high. These terms can also apply to individual stocks (“Stock X is in correction territory,” for example), but individual stocks can see much more volatility than the overall market.

The most severe stock market correction in history, in terms of points, happened in 2018, when the Dow declined 1,175 points in a single day. Previously the record had been a 777-point decline.

However, the 2018 4.6% drop wasn’t the biggest decline in terms of percentage. In 1987, on a day called Black Monday, the Dow dropped by 22.6%. That would be equivalent to 5,300 points in today’s market.

Market Correction vs Market Crash

It can be tempting to use the terms “crash” and “correction” interchangeably, and sometimes, that may be appropriate. But in a more general sense, a “crash” refers to a more sudden and drastic fall in the market. Whereas a correction may occur over weeks, a crash could happen within a single day or days.

💡 Quick Tip: Are self-directed brokerage accounts cost efficient? They can be, because they offer the convenience of being able to buy stocks online without using a traditional full-service broker (and the typical broker fees).

The Nature and Frequency of Market Corrections

Stock market corrections happen every once in a while. They are, in fact, a normal part of the market cycle. That’s important for investors to keep in mind, as it’s not unusual at all for the market to experience a correction.

How Common Are Market Corrections?

Dating back to the mid-1900s, stock market corrections have typically happened three to four times every year. Although it’s nerve-wracking every time, these corrections are a normal part of the market cycle, as mentioned.

Duration and Impact of Corrections

When a correction occurs, you will likely see the media speculate whether it’s a crash or a correction, how long the correction will last, and perhaps, if the economy is going into a recession. This speculation is just that; there is no way of knowing exactly how big a correction will be or how long it will last.

A stock market correction is not typically the cause of a recession, nor is it a predictor of a coming recession. Stock market corrections can be stressful for investors and companies, but they are not necessarily signs of a poor economy.

Although there is no way of predicting how long a market correction will last, you can look to past data as some indicator of possible trends.

Average Market Recovery Time After Corrections

While corrections can happen quickly or play out over a prolonged period, a full recovery generally happens within a few months, per past market data.

Navigating Through Market Corrections

Given that market corrections are common, investors would do well to know how to handle them. That may or may not involve making any changes to your portfolio.

Preparing Your Investments for a Correction

Unless you exclusively own stocks in an S&P 500 index fund, your portfolio may perform differently from the overall market. When a stock market correction occurs, the percentage drop is generally referring to the performance of the S&P 500 index. This is an index of the largest U.S. companies in the stock market.

The stocks in your portfolio may fall in value more or less than the overall market. Some of your stocks may even go up in value. It’s important to remember that if your portfolio drops by a certain percentage, it will need to go up more than that percentage to recoup your losses.

Strategies for Investing During Corrections

Generally, a good rule of thumb is to stay invested through a market correction — or, stick to a buy-and-hold strategy. If, for example, someone sells off their stocks during a panic, they could see them go back up in value again in a few days or weeks. If anything, depending on your strategy and goals, you may want to consider buying stocks during a market correction, because prices will have lowered.

You could consider whether you have available funds you’d like to invest during a downturn, and decide if you want to purchase more shares of stocks you already own or if you want to find new stocks to buy. Diversifying the stocks in your portfolio may help you weather the storm of a market correction.

If you do choose to purchase stocks during a market correction, be aware that their value may continue to decline before it recovers again. There’s also no guarantee that it will.

Also remember that the market has bounced back from some severe corrections and crashes over the years. Corrections happen every year and can be healthy for the market.

Behavioral Biases to Watch During Corrections

For investors, corrections can be disorienting and emotionally fraught. You feel like you need to make a move, especially if you’re seeing the value of your holdings decline before your eyes.

With that in mind, it’s a good rule of thumb to try and disconnect from your emotions and make grounded decisions in line with your investment strategy. That may mean you don’t do anything at all; it may mean that you actually invest more to take advantage of a dip in prices. The point is, corrections are often a time during which markets are in flux, and you should do your best to keep a cool head while things play out.

Identifying Causes and Signs of Market Corrections

There can be numerous reasons that the market experiences a correction. And they typically can’t be predicted with any real sense of accuracy.

Key Factors Leading to Corrections

Since so many things could potentially lead to a market correction, it’s hard to say with any certainty what, exactly, is or was the catalyst. But generally, things like rising prices (inflation), slow economic growth, bad or disappointing corporate earnings reports, or even surprising news — say, a war breaks out, or some sort of political upheaval takes place — can cause the market to see a steep decline into correction territory.

Can Market Corrections Be Predicted?

As mentioned, market corrections can’t really be predicted. While it’s almost certain that there will be corrections in the future, discerning when, exactly, they’ll happen is nearly impossible — nobody has a crystal ball.

Technical Indicators That May Signal a Correction

There are many technical indicators that could possibly signal a market correction. Some are fairly common and straightforward, while others are not. That can include certain candlestick patterns, the Hindenburg Omen, and the Elliott Wave, among other things.

It can also include looking at moving averages, and trends of market indexes to get a sense of which way the market is heading.

Coping With Market Corrections as an Investor

Market corrections are going to happen, it’s a near certainty. But that doesn’t mean investors need to panic every time the market has a hiccup.

What to Do During a Market Correction

The first step in knowing what to do during a stock market correction is to find out why it’s happening. If possible.

Next, look into your individual portfolio and see how it’s being affected by the correction. This will help you decide whether to buy, sell, or hold on to the stocks in your portfolio.

Remember that stock market corrections are normal. If you have a long-term investing strategy, you will likely see market corrections, bear markets, and recessions during your years of investing. Try to stay calm and reconsider decisions that might be made based on fear or panic. It may not help to obsess over the value of your portfolio on any particular day.

Long-term Strategies for Handling Market Volatility

In terms of handling market volatility over the long term, here are some things and overarching principles investors can try to incorporate into their investment strategy.

• Have a plan: Buying stocks without a plan can lead to an emotional rollercoaster when they fall in value. Know what your goals are and plan for them, being aware that market volatility is a part of investing. Even when the market corrects, remember that you may still reach your goals for the year or over the long-term if you planned for them. If you’re investing money to use in just a few months versus for your retirement, your strategy may look very different.

• Diversify: One way to help protect your portfolio from significant market crashes is to spread out investments over different types of assets. This is called diversifying your portfolio, and this tactic may help lower your risk of losses while still exposing yourself to potential gains. You can diversify into many different types of investments, including bonds, real estate, commodities, and simply by holding cash.

• Consider cashing out: Investors can be afraid to cash out of a particular stock because it may continue to rise in value. If you own a stock which has gone up significantly, you may want to cash out some of the investment and diversify it into other investments.

• Keep risk tolerance in mind: If you are growing your portfolio for long-term use, you can likely handle a few ups and downs in the market cycle. However, if it causes you too much stress to see your portfolio go down in value a lot in one day, perhaps it’s better not having so much invested in stocks.

• Don’t try to time the market: On the same note, selling off your investments because you think the market is going south may not be a great strategy. The stocks you’re holding may continue to go up in value, and even if they do crash, trying to time your reentry can be just as challenging as timing your exit.

• Think long term: Day trading and short-term investing are risky. If you build a diversified portfolio which you plan to keep invested for a long time before using it, it may be able to withstand cycles in the market and still continue to grow.

Emotional Discipline and Investor Psychology

As discussed, market corrections can be psychologically trying for investors. That’s especially true for those who don’t have much appetite for risk. So, it can be important to keep your wits, remain disciplined, and keep your larger strategy or investment plan in mind. Truthfully, investors should anticipate market corrections; they’re going to happen whether you like it or not.

So, remember that corrections are simply a natural part of the market cycle, and do your best to stick to your strategy.

Real-World Examples of Market Corrections

As noted, corrections are common. In fact, the S&P 500 entered correction territory three times during 2022. It also happened more than once in 2023, and as of writing, the most recent market correction occurred during October 2023, as the market slid for a few months after topping out at a previous high in July 2023.

The Takeaway

Stock market corrections are when the market falls 10% from a previous high, and they’re common parts of the market cycle. As you build your portfolio and mentally prepare for the next stock market correction, remember that you are not alone. Market crashes, dips, and corrections are stressful for everyone, and there are tools and specialists to help you navigate them.

Working with an investment advisor may help you stay calm throughout economic cycles. Planning your portfolio for diversification and long-term growth may also help you ride the waves of the market.

Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.¹

FAQ

What happens in a stock market correction?

During a stock market correction, the market slides at least 10% from a previous high due to any number of factors.

Are corrections good for the stock market?

Corrections can be good for the stock market in a similar way that a wildfire can be good for a forest — they can serve as a reset to valuations that may have gotten too high, and lower security prices for investors looking to deploy capital.

How long do stock market corrections last?

There’s no telling how long a correction could last, but it’s important to keep in mind that historically, the market has always bounced back given enough time.

What is the biggest stock market correction of all time?

The biggest drop in the S&P 500 in a single day was in October 1987, when the index fell more than 20% into a bear market.

How often should you expect a stock market correction?

Since the 1950s, the S&P 500 has experienced dozens of market corrections, and that means that one occurs less than every two years, on average.

How many corrections have there been throughout history?

Since 1974, there have been 27 market corrections, while only six of those grew in severity to become bear markets.

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q325-060

Sep

2025

What Is IPO Due Diligence?

By Rebecca Lake | Growing Wealth, invest, Investing | Comments Off

Table of Contents

IPO Due Diligence Process
Objective of IPO Due Diligence
Benefits of Due Diligence Process
Next Steps in Filing an IPO
FAQ

As part of the IPO process, private companies must perform due diligence to ensure that they’ve met all the requirements for being listed on a public exchange. This ensures that the company follows all registration and disclosure guidelines established by the Securities Act of 1933.

Broadly speaking, IPO due diligence is similar to the due diligence performed in other situations involving large amounts of capital. Just as an investor may research certain aspects of a company before deciding to purchase shares, a company that’s planning an IPO must have an understanding of the various factors that could positively or negatively affect its success.

If you’re interested in IPOs, it’s helpful to know what goes on behind the scenes and how the IPO due diligence process works, given that IPO stocks are considered high-risk securities.

Key Points

• IPO due diligence is a process of researching a private company to make sure it meets the requirements for being listed on a public exchange.

• The due diligence process involves gathering information about the company’s organizational structure, licensing and taxes, board and employee information, financial information, customer/service information, and company property.

• Benefits of IPO due diligence include an opportunity to explore the viability of an IPO for the company and more information for investors on the company and its risks.

• Steps to filing an IPO include SEC review, IPO roadshow, pricing, launch, stabilization, and transition to market.

• Due diligence can help inform investors whether the company complies with all relevant SEC regulations.

IPO Due Diligence Process

During the IPO due diligence process, the IPO underwriters and IPO attorneys will work together to perform the necessary background research to gain a better understanding of the company, its management, and its financials. This involves gathering the following information:

1. Organizational Data

During the first stage of the IPO due diligence process, the underwriters and attorneys gather information about the company’s organizational structure. This may include requesting copies of any or all of the following:

• Articles of incorporation

• A list of the company’s shareholders and committees

• An overview of the number of shares owned per individual shareholder

• Annual business reports for the previous three years

• Company business plans or strategic plans

• A breakdown of the company’s organizational structure, including board members, directors, and employees

The underwriting team may also request a copy of a certificate in good standing from the state’s Secretary of State, along with information on organizational decision-making.

💡 Quick Tip: Access to IPO shares before they trade on public exchanges has usually been available only to large institutional investors. That’s changing now, and some brokerages offer pre-listing IPO investing to qualified investors.

2. Licensing and Taxation

The next step in IPO due diligence involves collecting information about the company’s licensing and taxes. At this stage, the IPO underwriter and/or attorneys may request copies of:

• All business licenses currently issued to the company

• Annual tax returns

• Government licenses and permits held by the company

• Employment tax filings

• Comprehensive reports of the company’s tax filing data

The underwriting team may look back three years or more when analyzing income tax returns and tax filing information.

Recommended: The IPO Process

3. Board and Employee Information

Due diligence can also extend to information about the company’s board of directors, its managers, and its employees. At this phase of IPO due diligence, underwriters and attorney may request:

• A list of all individuals it employees

• Information about employee status, including each employee’s position and salary

• Details regarding employee benefits and bonuses, according to position

• A copy of company policies relating to sick leave or conflict resolution

• Details about employee insurance benefits, including health, disability and life insurance

• Copies of resumes for leading personnel

• Copies of employee audits

With regard to employee audits, underwriters may look back two to three years.

💡 Quick Tip: Before opening any investment account, consider what level of risk you are comfortable with. If you’re not sure, start with more conservative investments, and then adjust your portfolio as you learn more.

4. Financial Information

A company’s finances can come under close scrutiny during the IPO due diligence process. When considering financial information, the IPO underwriting and legal team may review:

• Copies of broker or investment banking arrangements

• Company financial statements records, including previous financial audits

• A list of all financial accounts held by the company

• Copies of financial analyst reports

• Information about the company’s inventory holdings

• Details regarding the company’s accounting and amortization methods

• A list of all fixed and variable expenses

The timeframe for which underwriters can review financial information can stretch from the previous three to five years, depending on what they’re examining.

Recommended: How to Read Financial Statements

5. Customer/Service Information

Due diligence also takes into account interactions with customers and service practices. During this step, the underwriting team may request:

• Reports or information about the products and services offered by the company

• Details about consumer complaints filed against the company

• Information about legal approvals for the company’s products and services

• Copies of the company’s trading policies

• Details regarding the company’s marketing strategies as well as copies of marketing materials

The underwriters may also need to see copies of customer supply or service agreements.

6. Company Property

Last but not least, IPO underwriters will examine property holdings owned by the company. This can include reviewing information about:

• Business locations

• Real estate agreements and/or franchise licenses

• Trademarks and copyrights held by the company

• Approved patents held by the company

• Trademark complaints, if applicable

• Official contracts showing the purchase of real estate

The underwriters may also ask for a full inventory of any physical or real property the company owns.

Objective of IPO Due Diligence

During due diligence, the underwriting team is working to gain a full understanding of how the company operates, how it’s structured, how healthy it is financially, and whether there are any potential issues that could be a roadblock to going public. The due diligence process effectively clears the way for the next steps in the IPO process.

The IPO due diligence process ensures that there are no surprises waiting to crop up that could derail a company’s progress. It’s also an opportunity for the underwriting team, the IPO attorneys, and the company itself to assess any potential risk factors that may affect the IPO’s outcome.

Benefits of Due Diligence Process

IPO due diligence has benefits for both the company and investors.

IPO Due Diligence Benefits for the Company

• Due diligence offers an opportunity to explore the viability of an IPO, based on the company’s business model, financials, capital needs, and anticipated demand for its shares.

• Due diligence also allows the company to avoid going afoul of regulatory guidelines, and it can help to identify any issues the company may need to address before going public.

IPO Due Diligence Benefits to Investors

• The due diligence process can reveal more about a company than the information in the initial red herring prospectus. In IPO investing, a red herring refers to the initial prospectus compiled for SEC registration purposes.

• If investors feel confident about the information they have, that could help to fuel the success of the IPO which could mean more capital raised for the company and better returns for those who purchase its shares.

Note that an investor’s eligibility or suitability for trading IPO shares is usually determined by their brokerage firm.

Next Steps in Filing an IPO

Once the underwriting team has completed its due diligence, the company can move on to the next steps involved in how to file an Initial Public Offering (IPO). Again, that includes:

• SEC review

• IPO roadshow

• Pricing

• Launch

• Stabilization

• Transition to market

The SEC review typically takes between 90 and 150 days to complete. At this point, it’s up to the SEC to determine that all regulatory requirements have been met. Usually, the team conducting the review includes one or more attorneys and one or more accountants.

Next, comes the roadshow. During the roadshow, the company presents details about the IPO to potential investors. This step of the IPO process allows the company and underwriters to gauge interest in the offering and attract investors.

IPO pricing usually involves a closer look at the company’s financials, including its valuation and cash flow. Underwriters may also consider valuations for similar competitors when determining the appropriate IPO price.

After setting the IPO price, the underwriters and the company will schedule the IPO launch. Once the IPO launches, investors can purchase shares of the company. The underwriter can take action to stabilize the IPO price for a period of time following the launch. After that, the company transitions to market competition, concluding the IPO process.

The Takeaway

IPO due diligence is an important part of the IPO process. Due diligence ensures that a company about to go public complies with all relevant SEC regulations. Then, it’s up to qualified individual investors to decide whether trading IPO shares suits their goals and risk tolerance.

Whether you’re curious about exploring IPOs, or interested in traditional stocks and exchange-traded funds (ETFs), you can get started by opening an account on the SoFi Invest® brokerage platform. On SoFi Invest, eligible SoFi members have the opportunity to trade IPO shares, and there are no account minimums for those with an Active Investing account. As with any investment, it's wise to consider your overall portfolio goals in order to assess whether IPO investing is right for you, given the risks of volatility and loss.

Invest with as little as $5 with a SoFi Active Investing account.

FAQ

What is due diligence for an IPO?

Due diligence for an IPO refers to the process of investigating a private company’s financial, legal, operational, and regulatory status to make sure that it meets public listing requirements. Due diligence can also identify any potential risks or problems that could affect the company’s IPO. The goal of due diligence is to verify that the company is ready to go public.

What is IPO compliance?

IPO compliance refers to a company’s compliance with regulatory requirements in order to proceed with an initial public offering. Compliance helps ensure that a company meets financial reporting, adheres to strong governance, and has strong internal controls as required by the Sarbanes-Oxley Act, which was passed in 2002 to help protect investors from corporate fraud.

What are the types of IPO due diligence?

The main types of IPO due diligence include financial, legal, commercial, and operational due diligence. During the due diligence process, IPO underwriters and attorneys will also look at a company’s licensing, tax obligations and history, and board of directors and employees, among other factors. The purpose of due diligence is to verify information in all areas to identify and assess any risks and ensure the company’s readiness for going public.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

Photo credit: iStock/porcorex

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement. This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation Procedures.

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. This and other important information are contained in the Fund’s prospectus. For a current prospectus, please click the Prospectus link on the Fund’s respective page. The prospectus should be read carefully prior to investing.
Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor's risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.
Please note that Interval Funds are illiquid instruments, hence the ability to trade on your timeline may be restricted. Investors should review the fee schedule for Interval Funds via the prospectus.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

This article is not intended to be legal advice. Please consult an attorney for advice.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOIN-Q325-077

Sep

2025

What Is IPO Subscription Status?

By Samuel Becker | Growing Wealth, invest, Investing | Comments Off

Table of Contents

IPO Review
IPO Subscription Status Defined
Why IPO Subscription Status Matters
FAQ

An IPO subscription status describes the position of a company’s initial public offering (or IPO), as it relates to how many committed investors it has prior to the actual IPO.

For example, an IPO may be “fully subscribed,” “undersubscribed,” or “oversubscribed.”

Many investors are intrigued by IPOs, because it’s an opportunity to put money into a relatively early-stage company that has room to grow over time. Some companies draw more investor interest than others, and the IPO’s subscription status is one way to gauge that, because investors sign up with the intent to purchase a certain number of shares.

A company’s IPO subscription status doesn’t guarantee that the stock will perform one way or another. It’s just a preliminary indicator that may help interested investors navigate a potentially risky investment move.

Key Points

• An IPO subscription status describes the position of a company’s initial public offering (IPO) with respect to how many committed investors it has before the actual IPO.

• An IPO is when a company offers shares for sale to members of the general public for the first time through a stock exchange.

• Knowing an IPO’s subscription status can give investors an indication of how much demand there is for shares, and how an IPO stock may perform once it hits the exchanges.

• Typically, only certain investors can participate in IPO bidding and subscribe to an IPO.

• Individual investors may not have access to IPO subscriptions, but research can help them find the right companies to invest in as they go public.

IPO Review

“IPO” is an acronym that stands for “initial public offering.” It represents the first time that a company offers shares for sale to members of the general public through a stock exchange. Prior to an IPO, you would not be able to find a company’s stock trading on an exchange such as the New York Stock Exchange, for example.

Prior to going through the IPO process, a company is private, and its investors usually include its founders, employees, and venture capitalists. A private company usually decides to go public to attract additional investment.

But it’s the tricky period before an IPO, when a company is still private, that many prospective eligible investors look to make a move and get in early. This is when investors “subscribe” to an IPO, which means they’re agreeing or signaling their intent to buy a company’s stock prior to its IPO.

When the IPO executes, those investors may be able to purchase the number of shares to which they previously agreed. Typically, only certain investors can participate in IPO bidding and subscribe to an IPO.

💡 Quick Tip: The best stock trading app? That’s a personal preference, of course. Generally speaking, though, an effective app is one with an intuitive interface and powerful features to help make trades quickly and easily.

IPO Subscription Status Defined

A company’s IPO subscription status is a gauge of demand for an IPO. It refers to how many investors have subscribed, or signaled their intention to buy shares in the company. The goal of an IPO is for a company to sell all of its shares — or, to reach an IPO subscription status of fully subscribed, and a valuation in line with its calculations for pricing its IPO.

In that event, all of a company’s shares are spoken for prior to hitting the exchanges, and any leftover shares won’t see their values reduced in order to attract buyers. Early investors looking to cash out after an IPO typically must wait for the lock-up period to expire before they can sell their shares.

Keep in mind that many IPO stocks in the U.S. are bought by large, institutional investors involved with the IPO’s underwriter, an investment bank that helps a company prepare for an IPO and purchases shares in the company and resells them. But although the average retail investor is not typically included in an IPO roadshow, they may still be able to buy an IPO stock at its offering price.

Some brokerages have programs that allow qualified investors to request IPO stocks at their offering price, but there’s no guarantee those investors will actually get the shares.

Recommended: What Is IPO Due Diligence?

Why IPO Subscription Status Matters

An IPO’s subscription status matters in that it can give investors a sense of how an IPO stock may perform once it hits the exchanges.

Shows Demand of IPO Shares

Knowing an IPO’s subscription status can give investors an inkling as to how much demand there is for shares — if demand is high (meaning an IPO is fully or oversubscribed), it’s a signal that an IPO stock may gain value after its market debut. But it’s not a guarantee.

Conversely, an undersubscribed IPO sends a signal that investors aren’t that interested. And when stocks do hit the exchanges, they may see a price reduction soon thereafter.

💡 Quick Tip: Access to IPO shares before they trade on public exchanges has usually been available only to large institutional investors. That’s changing now, and some brokerages offer pre-listing IPO investing to qualified investors.

The Takeaway

While individual investors may not have access to IPO subscriptions, they can still participate in the IPO market. The key is doing thorough research to find the right companies to invest in as they go public.

Invest with as little as $5 with a SoFi Active Investing account.

FAQ

How many times can an IPO be oversubscribed?

IPOs get oversubscribed frequently, which means that more investors want to buy shares than a company has available to issue. There isn’t really a limit as to how many times it can be oversubscribed, but depending on the category of investor, it’s not uncommon for IPOs to be oversubscribed dozens or even hundreds of times.

What is an IPO subscription rate?

IPO subscription rates are an estimate of how many bids are received for each investor category (such as retail investors and institutional investors), divided by the number of shares allotted for each category by the company. This helps determine the level of participation among investors in each category.

What does IPO subscribed 2 times mean?

Essentially, it means that demand for IPO shares is twice as high as the number of available shares. The degree of oversubscription is typically shown as a multiple, such as two times, or five times, or whatever the multiple might be. The higher the multiple, the more demand there is for shares.

What happens if an IPO is not fully subscribed?

If an IPO is not fully subscribed, a company may lower the price of its shares or reduce the number of them to try to attract more investors. Undersubscription typically signals low investor confidence and demand.

Photo credit: iStock/SeventyFour

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement. This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation Procedures.

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. This and other important information are contained in the Fund’s prospectus. For a current prospectus, please click the Prospectus link on the Fund’s respective page. The prospectus should be read carefully prior to investing.
Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor's risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.
Please note that Interval Funds are illiquid instruments, hence the ability to trade on your timeline may be restricted. Investors should review the fee schedule for Interval Funds via the prospectus.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOIN-Q325-082

Sep

2025

IPO vs Acquisition: Advantages and Disadvantages

By Paulina Likos | Growing Wealth, invest, Investing | Comments Off

Table of Contents

How IPOs Work
Advantages of Going Public
Disadvantages of Going Public
What Is an Acquisition?
Advantages of Being Acquired
Disadvantages of Being Acquired
FAQ

An IPO, or initial public offering, is when a company makes its shares available for public trading for the first time. An acquisition is when one company takes over another company.

The difference between an IPO vs. an acquisition is important for investors to understand. When a company applies for an IPO, it enters into a process to be listed on a public exchange where investors can buy its shares. In an acquisition, the company being bought may not survive — or it may thrive, but only as part of the newly combined organization.

Investors contemplating investing in companies undergoing an IPO or an acquisition would do well to think through the benefits and risks.

Key Points

• An IPO, or an initial public offering, allows a private company to offer shares to the public to raise capital and enhance visibility.

• An acquisition occurs when one company buys a large portion, or all, of another company, taking control over its assets and operations.

• IPOs involve going public to raise funds and gain publicity, while acquisitions entail one company taking over another, potentially merging their resources and strategies.

• IPOs may result in raising substantial funds and publicity, but they also involve high costs, stringent regulations, and they expose companies to market volatility.

• Acquisitions can foster growth and innovation but may lead to conflicting priorities, strained partnerships, and brand reputation risks.

How IPOs Work

Private companies can go public with an IPO. That’s when they sell their shares to investors for the first time to raise capital to fund growth opportunities, create more awareness about the company, or to acquire other businesses, among other possible reasons.

The IPO process typically involves the private company hiring an underwriter like an investment bank to guide them through. The underwriter conducts an evaluation of the company to determine its valuation and growth potential, and helps the company decide the initial share price and the number of shares to offer.

Then the underwriter helps market the offering through what’s known as an IPO roadshow. The final IPO price is generally determined by investor demand.

Once the IPO has been reviewed and approved by the Securities and Exchange Commission (SEC), the company is listed on a public stock exchange where qualified investors can buy shares of the IPO stock.

Because IPO stock is highly volatile, it can be risky for retail investors to plunge into IPO investing. Doing thorough due diligence before investing in an IPO or any type of security is critical.

💡 Quick Tip: IPO stocks can get a lot of media hype. But savvy investors know that where there’s buzz there can also be higher-than-warranted valuations. IPO shares might spike or plunge (or both), so investing in IPOs may not be suitable for investors with short time horizons.

Advantages of Going Public

Taking a private company public has a number of possible advantages. These include:

Capital for Investment

For a company, the biggest benefit of an IPO is raising capital. Once investors start buying IPO stocks, the proceeds from an IPO may be substantial. The company typically uses the capital it raises for internal investments and expansion.

For example, the company could allocate the money to pay for research and development, hire more staff, or expand its operations.

Publicity

In some cases, IPOs generate publicity. This, in turn, can drive more attention to the company and get investors interested in purchasing shares of its stock. IPOs are frequently covered in business news, which adds to the IPO buzz.

However, if there is too much hype, that can contribute to high expectations for the stock, which can create stock volatility after the IPO.

Valuation

Some companies that go public may end up having higher valuations. Certainly, that is a hoped-for result of the IPO process. Because a public company has access to more capital, the shares of the company can increase in price over time. However, they can also lose value.

Disadvantages of Going Public

There are also drawbacks to going public. Companies must adhere to a series of steps and regulations in order to have a successful IPO, and the process can be arduous. Here are some of the disadvantages.

High Cost

Going public is expensive. The company needs to work with an investment bank that acts as an underwriter, and this is one of the largest costs associated with an IPO.

As noted earlier, IPO underwriters review the company’s business, management, and overall operations. In addition, legal counsel is required to help guide the company through the IPO. There are costs associated with accounting and financial reporting, and companies also accrue fees for applying to be listed on the exchange.

Not Enough Information for Investors

From an investor’s perspective, investing in an IPO can be challenging and risky. A company pursuing an IPO may be fairly new. In that case, investors may not have enough information or historical data on the company’s performance to make a determination on the company’s true value in order to decide whether the IPO is a sound investment.

Stock Market Stress

Once a company goes public, it is on the public market where it is subject to such factors as scrutiny, market volatility, and investor sentiment. Every move and decision the company makes, such as a corporate restructuring, change in leadership, or release of earnings reports, will be reviewed closely by industry analysts and investors, who will provide their opinions on whether the company is doing well or not.

💡 Quick Tip: The best stock trading app? That’s a personal preference, of course. Generally speaking, though, a great app is one with an intuitive interface and powerful features to help make trades quickly and easily.

What Is an Acquisition?

An acquisition is when one company, the acquirer, buys a majority or controlling stake in another company, the target.

This gives the acquiring company control over the target company’s assets and operations. The target company typically becomes a subsidiary of the acquiring company.

Advantages of Being Acquired

Being acquired doesn’t have to signal the end of a company — in fact, sometimes it can be a lifeline. These are some of the potential perks.

Growth

An acquisition could help a target company move into new markets and become a leader in its industry. If the company is working in a competitive landscape, being acquired may help increase its value and allow it to gain more market strength.

Innovation

When one company acquires another, this allows both companies’ resources, employees, and experiences to come together. This may enable the bigger company to generate new ideas and business strategies that may help increase the company’s earnings. It can also create a new team of employees with specialization and expertise that could help the company develop and reach new goals.

More Capital

When an acquisition occurs, it can increase the cash holdings and assets of the acquiring company and allow for more investment in the newly formed bigger company.

Disadvantages of Being Acquired

There are also distinct downsides to being acquired by another company, such as:

Conflicting Priorities

In some acquisition scenarios, there may be competing priorities between the two companies. The acquiring company and target company once worked as individual entities, but now, as one company, both sides must work together to be successful, which may be easier said than done. If there isn’t alignment on the goals of the organization as a whole, there is a possibility that the acquisition may fail, or the transition could be rocky and prolonged.

Pressure on Existing Partnerships

When an acquisition occurs and a company grows in size, it is likely that their goals will grow as well. For example, if the company wants to develop more products to expand into new markets, this could require their suppliers to figure out how they are going to ramp up production to meet the demand.

The supplier may need to raise more capital to hire staff or purchase additional equipment and supplies, which could cause stress.

Brand Risk

When two companies come together, if one has a poor reputation in the industry, the acquisition could put the other company’s brand at risk. During the acquisition process, both companies’ reputations may need to be evaluated to decide whether they merge under one brand or are marketed as separate brands.

The Takeaway

Both initial public offerings (IPOs) and acquisitions can offer opportunities for investors. However, these two events are quite different. An IPO is when a private company decides to go public and sell its shares to investors on the public market, while an acquisition is when one company buys another company.

There are a number of pros and cons regarding IPOs, just as there are advantages and disadvantages when a company is acquired. Potential investors need to thoroughly research each scenario to make sure it’s the right opportunity for them.

Invest with as little as $5 with a SoFi Active Investing account.

FAQ

Is an acquisition an IPO?

No, an acquisition is not an IPO. An acquisition is when one company purchases part of or all of another company to form one new company. An IPO is when a private company goes public and sells its shares to investors on the public market.

What is the difference between an IPO and a takeover?

An IPO is when a private company decides to go public and sell its shares to investors on the public market. A takeover is when one company takes control of another company. A takeover may be hostile, meaning it is unwanted by the target company’s management.

Is a takeover the same as an acquisition?

No, a takeover and an acquisition are not the same thing. However, a takeover is a type of acquisition. An acquisition is the purchase of a target company, and it may be friendly or hostile. A takeover is an acquisition that is typically unsolicited and unwelcome by the target company.

Photo credit: iStock/Yuri_Arcurs

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement. This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation Procedures.

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. This and other important information are contained in the Fund’s prospectus. For a current prospectus, please click the Prospectus link on the Fund’s respective page. The prospectus should be read carefully prior to investing.
Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor's risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.
Please note that Interval Funds are illiquid instruments, hence the ability to trade on your timeline may be restricted. Investors should review the fee schedule for Interval Funds via the prospectus.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This article is not intended to be legal advice. Please consult an attorney for advice.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOIN-Q325-083