SoFi’s Kelli Keough breaks down the latest trends in ETFs, thematic investing, and AI-driven growth.
Transcript:
Caroline Woods: Great joining me now Kelli Keough, EVP, group business unit leader for spend, invest, protect and save at SoFi. Kelli, thanks so much for joining us.
Kelli Keough: Thank you so much for having me here today.
Caroline Woods: So Kelli, you have a really unique perspective because you can see where your clients are actually putting their money. So tell us, where are they putting their money and what does that tell you about overall market sentiment?
Kelli Keough: Yeah, so I would say some of the trends that we are seeing is really that our members — we call them members — are interested in growth. And there’s multiple ways that you can get growth in the ETF marketplace. And, you know, first of all is there’s your core passive portfolio of ETFs. But interestingly, what we’re seeing is trying to push a little bit toward growth. And so, for example, we have some ETFs that are tilted toward growth. And that’s really interesting to our investors. Then you also see a desire for active ETFs. And that really helps them drive alpha in their portfolio. And so if you think about active ETFs in the industry, in the last year, last year we saw active ETFs globally grow over 50% relative to 11% for passive ETFs. And so we’re seeing that trend in our member base and how they’re choosing to invest — a lot of interest in trying to drive alpha in addition to having diversification.
Caroline Woods: That’s an interesting point because it used to be that ETFs just tracked the S&P 500, for example, for a lower cost. And now there are some out there that are trying to beat the market. So how does an investor know if they should stick with the passive ETFs, or maybe go into the active ETFs, which do come with a bit higher of a cost?
Kelli Keough: Yes, well I would say it can be both. And that’s really what, if you think about how we think about investing in the industry — and at SoFi, it’s for the long term with a diversified portfolio. And that often is a blend of passive ETFs for your core portfolio, or we’ll say passive ETFs that might have a growth tilt if you’re interested in that, which is something that SoFi provides. But then we also really help people understand there’s the satellite investments in addition to the core part of your portfolio. And that’s where we see our members and investors interested in exploring — whether they’re exploring for income, which is maybe a little less market dependent, and then also interested in thematic investing. And so going into places where they have strong convictions — sectors, spaces like commodities. And that’s where we’re seeing a proliferation of ETFs to really satisfy that satellite part of the investing portfolio.
Caroline Woods: I want to get into thematic investing and touch on growth as well that you were talking about. But before we do, I do think it’s important to note that there are more ETFs right now than actual individual stocks to invest in. So it can be complicated for some investors. So what’s the smartest way to build a portfolio given so many options out there?
Kelli Keough: Yes, well there are so many options. And it’s really important to start with what your goals are and think about that diversification. First, low cost. It’s SoFi, for example, we have our SoFi Select 500, which allows you to get a broad-based diversification but with a slight growth tilt if you want mid caps. We have a similar fund like that. You can work with your provider or companies like SoFi to help you find the ETFs that fit for you. And I like to think of it as sleeves. How do you have that sleeve, really, of your core? For your core — low cost. And then how do you think about what are areas that you’re interested in and build those sleeves out. Once you start to narrow in, it gets a little easier to choose. Now, one thing about ETFs, though, is it does help you — like we have a new agentic AI ETF at SoFi. And really what it does is it helps investors not have to know every company that is focused on agentic AI. But instead you can think, if I’m interested in this space, how do I find an ETF that helps me get into that space. So I would say, yes, there are a lot of ETFs, but it also can help people really select into the spaces they’re most interested in.
Caroline Woods: I was taking a look at your agentic AI ETF, AGI, and some of the biggest holdings aren’t big surprises there — Tesla, Palantir, Nvidia. But then there are also names like Heterodyne and Zoom that maybe you wouldn’t necessarily assume would be in there.
Kelli Keough: Right, right. So that the agentic AI ETF by SoFi, AGIQ, is what it does — it really tries to track the beta index which is focused on U.S. agentic stocks or companies.
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