The SFY ETF, also known as the AllianzIM U.S. Large Cap Buffer10 Jul ETF, is an exchange-traded fund that aims to provide investors with exposure to U.S. large-cap equity securities while offering downside protection through a buffer against the first 10% of losses.

What is the underlying index that the SFY ETF aims to track?

The SFY ETF seeks to track the price and yield performance of the S&P 500 Index, a widely recognized benchmark that represents the performance of large-cap U.S. stocks.

How does the SFY ETF work?

The SFY ETF uses Flexible Exchange Options (FLEX Options) that reference the SPDR® S&P 500® ETF Trust (the Underlying ETF) to achieve its objective. It aims to match the share price returns of the Underlying ETF, subject to a Cap and a Buffer.

What are the Cap and Buffer in the SFY ETF?

The Cap is the maximum percentage return that the SFY ETF can achieve during the Outcome Period (July 1 to June 30). The Cap for the current Outcome Period is 18.07% (reduced to 17.33% after considering the Fund's management fee). The Buffer provides downside protection against the first 10% of losses in the Underlying ETF's share price.

What outcomes does the SFY ETF seek to achieve for investors?

The SFY ETF aims to provide investors with three possible outcomes during the Outcome Period: (1) positive returns that match the Underlying ETF's share price returns, up to the Cap, if the Underlying ETF's share price increases; (2) compensation for the first 10% of losses experienced by the Underlying ETF's share price if it decreases; and (3) one-to-one losses beyond 10% decrease in the Underlying ETF's share price (i.e., 1% decrease in the Fund for every 1% decrease in the Underlying ETF) if it drops by more than 10%.

5 min read

By Ron Koren, ETF Insider

What is the SFY ETF ?

In the ever-evolving world of finance, Exchange-Traded Funds (ETFs) have become increasingly popular among investors due to their diversified and flexible investment options. One such ETF gaining attention is the SFY ETF, which provides exposure to a specific index. In this article, we will delve into the details of the SFY ETF, its underlying assets, benefits of investing in it, and essential considerations before making an investment.

SFY ETF: Overview

The SFY ETF is a passively managed fund that seeks to track the performance of the Solactive SoFi US 500 Growth Index. This index follows a rules-based approach to monitor the performance of 500 of the largest U.S.-listed companies, utilizing a proprietary blend of market capitalization and fundamental factors. The index is owned and managed by Solactive AG, and the methodology for index inclusion is co-developed with Social Finance, Inc. (SoFi). It is crucial to note that SoFi does not play a role in ongoing index maintenance or discretionary decisions related to its application.

SFY ETF Underlying and Exposure: What does it track and how?

The construction of the Solactive SoFi US 500 Growth Index begins with selecting the 500 largest constituents by market capitalization from the Solactive US Broad Market Index, comprising approximately 3,000 of the largest U.S. companies. The index may include common stocks and equity interests in real estate investment trusts (REITs).
The weight of each constituent in the index is determined initially based on its free-float market capitalization. Subsequently, it is adjusted upward or downward using a proprietary composite score, which considers three growth-oriented fundamental factors for each company: trailing 12-month sales growth, trailing 12-month earnings per share (EPS) growth, and 12-month forward-looking EPS growth consensus estimates. The composite score reflects an average of these three factors, adjusted to account for outliers.
The index is rebalanced and reconstituted annually on the first Wednesday of each May, based on data as of the tenth business day prior to the reconstitution date. As of June 1, 2023, the three largest constituents and their respective weights were Amazon.com Inc. (6.31%), Apple Inc. (5.19%), and Microsoft Corp. (4.86%).

SFY overlap What is the SFY ETF ?

SFY ETF: Benefits to Invest in this ETF

Investing in the SFY ETF offers several advantages. First, it provides exposure to a diversified portfolio of 500 large U.S.-listed companies, which spreads out the investment risk compared to investing in individual stocks. Second, the ETF follows a passive management strategy, which generally results in lower fees compared to actively managed funds. Third, it targets growth-oriented companies, potentially offering higher returns compared to broader market indices.

SFY ETF: Considerations Before Investing

While the SFY ETF offers numerous benefits, investors should consider some crucial factors before making an investment decision. As with any investment, there are risks involved. The fund's performance is closely tied to the performance of the underlying index, which can be affected by market fluctuations and economic conditions. Additionally, investors should carefully assess their risk tolerance and investment objectives to ensure that the SFY ETF aligns with their overall financial strategy.

Conclusion:

The SFY ETF provides investors with an opportunity to gain exposure to a diverse group of growth-oriented companies through a passively managed fund. By tracking the Solactive SoFi US 500 Growth Index, the ETF aims to replicate the performance of some of the largest U.S.-listed companies. However, before investing in the SFY ETF or any financial instrument, it is essential to conduct thorough research, assess risk factors, and consult with a financial advisor to make informed investment decisions.

Disclaimer:
This article is for informational purposes only and does not constitute investment advice or any form of recommendation. The content provided herein is not offering or providing any investment advisory services. Investors should consult with their financial advisors before making any investment decisions.

SFY ETF issuer
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FAQ

What is the SFY ETF?
The SFY ETF, also known as the AllianzIM U.S. Large Cap Buffer10 Jul ETF, is an exchange-traded fund that aims to provide investors with exposure to U.S. large-cap equity securities while offering downside protection through a buffer against the first 10% of losses.
What is the underlying index that the SFY ETF aims to track?
The SFY ETF seeks to track the price and yield performance of the S&P 500 Index, a widely recognized benchmark that represents the performance of large-cap U.S. stocks.
How does the SFY ETF work?
The SFY ETF uses Flexible Exchange Options (FLEX Options) that reference the SPDR® S&P 500® ETF Trust (the Underlying ETF) to achieve its objective. It aims to match the share price returns of the Underlying ETF, subject to a Cap and a Buffer.
What are the Cap and Buffer in the SFY ETF?
The Cap is the maximum percentage return that the SFY ETF can achieve during the Outcome Period (July 1 to June 30). The Cap for the current Outcome Period is 18.07% (reduced to 17.33% after considering the Fund's management fee). The Buffer provides downside protection against the first 10% of losses in the Underlying ETF's share price.
What outcomes does the SFY ETF seek to achieve for investors?
The SFY ETF aims to provide investors with three possible outcomes during the Outcome Period: (1) positive returns that match the Underlying ETF's share price returns, up to the Cap, if the Underlying ETF's share price increases; (2) compensation for the first 10% of losses experienced by the Underlying ETF's share price if it decreases; and (3) one-to-one losses beyond 10% decrease in the Underlying ETF's share price (i.e., 1% decrease in the Fund for every 1% decrease in the Underlying ETF) if it drops by more than 10%.

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