The Best ETF For Following The Robinhood Crowd

The SoFi Social 50 ETF (SFYF) tracks the most popular stocks on its platform, which includes a mix of popular mega-cap names sprinkled in with the latest buzz stocks.
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Up until August 2020, one of the financial markets' favorite tools had nothing to do with screening stocks and developing charts. It was robintrack.net. This was the website that obtained the collective holding information from Robinhood account holders and published a "leaderboard" of the most popular holdings.

It was the most popular way to gauge retail trader sentiment and was quoted by any number of financial news site, including this one!

But Robinhood discontinued the data feed and we no longer have a peek into what these smaller retail traders are doing. The trading platform said it may restart it at some point in the future, but I wouldn't count on it happening anytime soon.

That doesn't mean we're completely in the dark though.

SoFi has its own trading platform and while it's not nearly as big or buzzworthy as Robinhood, it does provide a view into what traders are buying and selling. In fact, you can even invest in it!

The SoFi Social 50 ETF (SFYF) tracks an index that identifies the most popular stocks on its platform. According to the fund's website:

SFYF is composed of the top 50 most widely held U.S. listed stocks on SoFi Invest. Stocks are rebalanced monthly and weighted according to how much money members have invested in each company at the end of every month.

It actually ends up looking fairly similar to how Robinhood's most popular stock list - a mix of popular mega-cap names sprinkled in with the latest buzz stocks of the moment.

We can discuss the nuts and bolts of the fund in a moment, but most investors will be interested in SFYF's top holdings, so let's just cover them now.

SFYF ETF Top Holdings

SFYF ETF Top Holdings

Perhaps not surprisingly, AMC Entertainment (AMC) is the ETF's top position at 8% of holdings. That's actually come down from well into the double-digits when the stock was first going parabolic, but it's clearly underscoring the wide interest in trading meme stocks at the moment.

A little further down the top 10 list is GameStop (GME), the original meme stock, which is still drawing interest from the Reddit crowd, although AMC seems to be the stock of choice at the moment. That's about it from the WallStreetBets crowd. SFYF does have small positions in both Nokia (NOK) and BlackBerry (BB), which briefly had their moments in the sun, but the meme stock trading crowd appears to be zeroing in just on AMC at the moment.

There are a lot of other interesting stories from the top holdings list.

The presence of names, such as Apple (AAPL), Amazon (AMZN), Disney (DIS) and Microsoft (MSFT), in the top 10 isn't too surprising since they're included in many investor portfolios. Tesla (TSLA) as the 2nd largest holding is also expected, but Nio (NIO) in the #5 spot emphasizes the interest in electric vehicles right now. Nio is the Chinese version of Tesla and is expanding rapidly throughout Asia and Europe. Ford (F), which is also making big investments into electric vehicle development, is just outside of the fund's top 20 holdings.

Other sectors and themes SoFi investors are focusing on:

  • Reopening Trades - SoFi investors are also focusing heavily on reopening trades. Delta Air Lines (DAL), Carnival (CCL), American Air Lines (AAL), Southwest Airlines (LUV) and Uber (UBER) are sprinkled in throughout the portfolio.
  • Cannabis - They don't appear as large holdings within SFYF, but there are positions being held in Sundial Growers (SNDL), Aurora Cannabis (ACB) and Canopy Growth (CGC)
  • Retail - Some big names, such as Square (SQ), Shopify (SHOP) and Nike (NKE) appear because they're mega-cap names more than anything, but there is also Alibaba (BABA), Starbucks (SBUX), Walmart (WMT), Target (TGT) and Costco (COST).

About SFYF

SFYF launched in May 2019 and still has a relatively modest $25 million in assets. The company, however, is doing a really nice job of building out its ETF lineup, which already includes the SoFi Select 500 ETF (SFY) and the SoFi Next 500 ETF (SFYX) - both of which currently come with 0% expense ratios. There are also the SoFi Weekly Income ETF (TGIF) and the SoFi Weekly Dividend ETF (WKLY), which I've already covered HERE and HERE, as well as the SoFi Gig Economy ETF (GIGE).

I suspect that a fund, such as SFYF which actually does offer an interesting glimpse into the mindset of retail traders, is getting drowned out by Robinhood, Reddit and WallStreetBets. Whether or not you want to actually invest in the most popular stocks being traded on these platforms, the insight provided by SFYF is almost certainly worth following.

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