SoFi bets on AI with new Agentic AI ETF as sector faces valuation doubts

SoFi Technologies has unveiled an Agentic AI ETF (AGIQ), its first after nearly two years. The ETF tracks the BITA U.S. Agentic Select Index, which covers 30 U.S.-listed firms that target AI, including Nvidia and Deere, with a 0.69% expense ratio.   

Agentic AI ETF targets to capture firms involved in developing or deploying agentic AI autonomous systems capable of decision making, initiating actions, and collaborating with other agents. The BITA U.S. benchmark tracks firms in technology, including Nvidia, Tesla, and Salesforce. 

New SoFi Agentic AI ETF targets AI technology firms

SoFi has confirmed that Agentic AI ETF (AGIQ) has a gross expense ratio of 0.69%, and Tidal Investment acts as the advisor. It also confirmed that the fund will be hosted on SoFi Invest and other brokerage platforms. 

Brian Walsh, head of advice and planning at SoFi, described the ETF as a way for retail investors to capture the evolving AI landscape in their portfolios. He added that the product goes above and beyond what first-generation AI exposure can provide. In an interview with Reuters, he said the index is designed to adapt to changes in the AI ecosystem.

The launch follows a growing skepticism surrounding AI firms. Some investors have begun questioning the valuation of the AI market, citing that it could be overvalued. They have questioned whether tech giants like Nvidia and Palantir Technologies, which have driven the sector’s valuation, can sustain in the long term. Some analysts have noted that confidence towards the industry remains strong, but markets have shown signs of profit-taking in recent days. 

Walsh revealed that the emerging market themes can be challenging to capture, especially for new or casual investors. He said that with the SoFi Agentic AI ETF, investors can easily gain access to the next AI evolution. 

According to Solactive, a Germany-based index provider, companies are screened for the index based on whether they can deliver a meaningful portion of their revenue from AI. The AGIQ ETF spans across transport, AI scheduling assistants, cybersecurity, industrial machinery, semiconductors, and cloud infrastructure. 

SoFi targets the AI landscape, as some analysts warn of overcrowding 

SoFi also offers other ETFs, such as the SoFi Enhanced Yield ETF, introduced in November 2023, SoFi Select 500, SoFi Next 500, SoFi Social 50, and Defiance Daily Target 2X long SoFi ETF. The firm positions itself with a mix of active and passive strategic investments that offer flexible access to growth themes and core exposures. 

Industry observers have questioned the challenge posed by already existing look-alike ETFs that capture AI themes. Roxanna Islam, head of sector and industry research at VettaFi, commented that the AI tracking ETF market has become crowded, with managers rushing to roll out products tied to the trend. He added that it will be difficult for new entrants to stand out and gather assets at this point. 

Globally, AI-linked strategies are erupting, including 190 Single-Stock Leveraged and Inverse ETFs that give investors the chance to amplify their bets on stocks such as Nvidia, Tesla, and Palantir. The most recent notable launch was the Janus Henderson Global Artificial Intelligence ETF, which was unveiled on August 19 and has already drawn millions in inflows with a total net asset of $7.74 million. 

Steve Sosnick, market strategist at Interactive Brokers (IBKR), noted that some investors have made significant profits from prominent AI names. He acknowledged that, despite sentiments being driven that the AI market is overvalued, demand remains evident. 

SoFi aims to use the AGIQ ETF to gain re-entry into the market. The firm insisted that while thematic ETFs offer a simple route towards fast-growing sectors, risk should be taken into consideration due to possible rapid technological changes.  

SoFi stock is currently trading at $24.86 with a 0.18% change today.  The stock YTD is up 61.55%, showing a maintained positive investor confidence in the ETF firm. 

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