Online lender SoFi plans to launch two new exchange-traded funds (ETFs) that will come with a big carrot: Zero management fees for an introductory period.
SoFi makes unprecedented move in the investing world
SoFi is best known for offering online options to refinance student loans. But now the fintech company wants to get into the investing space.
The SoFi ETFs — the SoFi S&P 500 ETF and SoFi Next 500 ETF — will waive the normal fee of 0.19% through at least March 27, 2020, according to a regulatory filing.
That means, of course, you will be paying that fee after March 2020, which is something to keep in mind.
Both SoFi ETFs will offer exposure to U.S. stocks.
For those unfamiliar with ETFs, Clark Howard says they are similar to index funds but managed a little differently.
“ETFs tend to have lower costs over time than an index fund, so they’re ideal if you get a big bonus and you’re putting a lot of money in at once,” the money expert notes.
“However, you’re better off doing an index fund if you’re doing dollar-cost averaging by putting in little dribs and drabs of money, month by month. Basically, ETFs and mutual/index funds are the same thing for different purposes, just managed a different way.”
SoFi’s unprecedented move to launch the industry’s first no-fee ETFs follows closely in Fidelity Investments footsteps. The latter company launched a slate of groundbreaking no-fee index funds in early August 2018.