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Cathie Wood’s Ark Investing offers a number of popular contributed collections (ETF) and are usually quite concentrated, with three dozen or less actions. And an action in which Wood seems to have a lot of faith Sofi technologies (Nasdaq: Sofi). The innovative bank is the sixth largest participation of the Ark Fintech Innovation ETF (NYSEMKT: ARKF)representing 5% of the total number of assets of the fund.
You will also find about $ 95 million of Sofi Stock on the flagship Ark Innovation ETF (NYSEMKT: Arkk)And it is also worth noting that the Sofi application is the exclusive distribution partner of Ark risk funds (NASDAQMUTFUND: Arkvx)that allows investors to expose themselves to companies like Spacex and Openai before their initial public offer.
To say that Sofi’s performance has recently been strong would be a euphemism. Shares have shot more than 140% for the last six months and have just reached a new 52 -week maximum. But here’s why I don’t plan to charge at any time soon.
One of the most encouraging advances is the increase in Sofi personal loans demand. It started with an investment of $ 350 million by PGIM Fixed Incompe in mid -2024, but it has just been announced that PGIM closed another $ 525 million personal loans with Sofi. PGIM, which manages $ 860 billion in assets, described Sofi’s personal loans as an “attractive investment opportunity”.
This is a big problem, as Sofi does not necessarily want to keep thousands of dollars in personal loans at his balance (about $ 17 billion were in the balance sheet at the end of the third quarter). The origin and qualification of loans is a much more attractive business from the risk/reward point of view, and Sofi is also rapidly expanding its capabilities as a platform for generating third -party loans, which should generate increasing flow of income by light capital commissions.
In addition, Sofi could be a great beneficiary as interest rates are lowered, as well as later political winds. Although the rate of federal reserve type cuts is likely to be slower than expected, the most likely direction of interest rates over the coming years is even lower. This could help Sofi reduce deposit costs and increase demand for loans (both customers and assets managers).
In addition, the Trump Administration clearly favors more flexible regulations on banks, as well as lower corporate taxes, which could undoubtedly benefit Sofi.
We will see Sofi’s latest results when reporting on his final year 2024 on Monday, January 27. But in the third quarter, the base of Sofi members grew at 756,000, the highest part of new members. ever.
