If you’re looking to invest in SoFi, ETFs can be a simple way to build a diversified portfolio without having to pick individual stocks. Instead of betting on one or two companies, ETFs allow you to own a broad collection of businesses with a single investment.
The key is knowing what makes an ETF worth owning, choosing funds with low costs and broad diversification, and creating an allocation that matches your age and investment goals.
Here are four ETFs to consider when you invest in SoFi, along with a simple framework for deciding how to divide your money.
What Makes a Good ETF?
Before you invest in SoFi ETFs, there are three important factors to consider: fees, diversification, and track record.
Low Expense Ratio
An expense ratio is the annual fee charged by an ETF. You don’t receive a bill for it; the fee is deducted from the fund’s assets automatically.
Even seemingly small differences in fees can have a significant impact over decades because investment costs compound over time. For that reason, low-cost ETFs are generally attractive for long-term investors.
Many broad-market ETFs have expense ratios below 0.10%, with some of the funds discussed below charging just 0.03%.
Broad Diversification
Diversification is another major advantage of ETFs. Instead of putting your money into a handful of individual stocks, you can own hundreds or thousands of companies through a single fund.
If one company performs poorly or even goes bankrupt, its impact on a highly diversified portfolio is limited. This makes broad-market ETFs a popular alternative to trying to identify individual winning stocks.
A Long Track Record
A fund that has performed well for two years doesn’t necessarily have a proven investment strategy. When you invest in SoFi for the long term, it’s worth considering ETFs that have existed through different market environments.
Funds with long histories have experienced bull markets, recessions, market crashes, and periods of extreme volatility. That history can provide more information about how an investment behaves when conditions aren’t favorable.
With those three criteria in mind, let’s look at four ETFs that can form the foundation of a diversified portfolio.
ETF 1: VTI
VTI is the Vanguard Total Stock Market ETF, and it can serve as the foundation of a portfolio when you invest in SoFi.
The fund provides exposure to essentially the entire U.S. stock market, including large-, mid-, and small-cap companies. That means you aren’t limited to the biggest corporations. Alongside companies such as Apple, Microsoft, Nvidia, Amazon, and Alphabet, VTI also holds many smaller businesses.
VTI’s expense ratio is just 0.03%.
The major appeal is simplicity. Rather than trying to determine which individual company will outperform over the next decade, VTI gives you exposure to a broad portion of the U.S. equity market through one ETF.
For someone who wants to keep their portfolio straightforward, VTI can be a strong core holding.
ETF 2: VO
VO is the Vanguard S&P 500 ETF and focuses on large U.S. companies.
While VTI covers companies across the U.S. stock market, an S&P 500 fund concentrates on the largest companies in the market. These include many of the corporations that dominate the U.S. economy, such as Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, and Berkshire Hathaway.
VO also has a 0.03% expense ratio.
The trade-off is concentration. Because the fund focuses on large companies, particularly the biggest corporations, it can have greater exposure to mega-cap stocks and technology companies than a total-market fund.
That can work well for investors with a long time horizon who are comfortable with greater concentration. However, it also means that a sharp decline among large growth companies can have a noticeable effect on the fund.
If you want to invest in SoFi with an emphasis on established U.S. companies, an S&P 500 ETF can be an option to consider.
ETF 3: SCHD
SCHD, the Schwab U.S. Dividend Equity ETF, takes a different approach from VTI and VO.
Rather than focusing primarily on broad market growth, SCHD emphasizes established U.S. companies with strong dividend characteristics. The fund holds roughly 100 companies and is designed around quality and dividend-related criteria.
Its expense ratio is 0.06%, which remains relatively low compared with many actively managed funds.
Dividend ETFs can provide investors with income distributions while also offering the potential for long-term capital appreciation. This can make SCHD particularly interesting for investors who want to place greater emphasis on income as they get closer to retirement.
However, dividends aren’t guaranteed, and a company’s dividend can be reduced or eliminated. Investors should therefore look beyond the dividend yield itself and consider the underlying companies and the fund’s methodology.
ETF 4: VXUS
VXUS is the Vanguard Total International Stock ETF.
The first three ETFs focus on U.S. companies, while VXUS provides exposure to stocks outside the United States. It includes companies from regions such as Europe, Japan, the United Kingdom, China, India, Brazil, and Australia.
The fund has an expense ratio of 0.05%.
International stocks haven’t always performed as well as U.S. stocks. In particular, U.S. equities significantly outperformed many international markets over much of the 2010s and early 2020s.
That doesn’t necessarily mean international stocks should be ignored.
Different countries and markets can perform differently over different periods. Holding some international exposure can therefore provide additional diversification and reduce dependence on the U.S. market.
For investors who primarily want U.S. exposure, a relatively small allocation to VXUS may be enough to provide that additional diversification.
Why Fractional Shares Matter When You Invest in SoFi
One advantage of fractional investing is that you don’t necessarily need enough money to purchase an entire ETF share.
For example, if an ETF has a share price of several hundred dollars, you can still invest a smaller amount if fractional shares are available for that security on the platform.
That makes it easier to invest in SoFi with smaller amounts of money and contribute regularly.
Instead of waiting until you have enough money to buy a complete share, you can put a predetermined amount toward your portfolio each month and divide it among your chosen ETFs.
For example, someone investing $100 could allocate:
- $40 to VTI
- $20 to VO
- $30 to SCHD
- $10 to VXUS
The exact dollar amounts aren’t what matters most. The important part is establishing an allocation you can maintain consistently.
How to Split Your ETF Portfolio
Once you’ve chosen your ETFs, the next question is how much money should go into each one.
One simple framework is to increase the allocation to dividend-focused investments as you get older.
For example, the following approach uses your age as the percentage allocated to SCHD:
| Age | SCHD | VTI | VO | VXUS |
|---|---|---|---|---|
| 30 | 30% | 40% | 20% | 10% |
| 40 | 40% | 30% | 20% | 10% |
| 50 | 50% | 20% | 20% | 10% |
| 60 | 60% | 10% | 20% | 10% |
The idea behind this framework is that younger investors generally have more time to tolerate market volatility and benefit from long-term growth. As retirement approaches, some investors may prefer to place greater emphasis on income-producing investments.
This isn’t a universal formula, however. Your ideal allocation depends on your risk tolerance, financial goals, income needs, investment horizon, and other assets you own.
The percentages are less important than having a sensible strategy that you can stick with.
What Matters Most After You Invest in SoFi
Choosing ETFs is only one part of successful long-term investing.
The bigger challenge is staying consistent.
Markets will fall. Your portfolio could temporarily lose 10%, 20%, or even more during a severe downturn. It’s easy to feel confident when markets are rising, but the real test comes when your account balance is falling.
Rather than constantly jumping between investments, long-term investors often benefit from establishing a strategy and continuing to contribute through different market conditions.
That also means resisting the temptation to chase whatever stock or investment happens to be popular at the moment.
When you invest in SoFi, the goal shouldn’t be finding the one ETF that will make you rich overnight. A more realistic approach is to build a diversified portfolio, keep costs low, contribute regularly, and give your investments time to compound.
Final Thoughts
The four ETFs discussed here each serve a different purpose.
VTI provides broad exposure to the U.S. stock market. VO concentrates on large U.S. companies. SCHD adds a dividend and income focus, while VXUS provides international diversification.
You don’t necessarily need all four to build a portfolio. In fact, a simple portfolio with one broad-market ETF may be enough for some investors.
If you do decide to invest in SoFi using multiple ETFs, focus on keeping your strategy diversified, understanding what you own, and choosing an allocation that fits your circumstances.
The perfect ETF matters far less than developing a long-term plan and actually sticking to it.
