Do you need dividend income? Do you need it weekly? If so, today’s debut of the SoFi Weekly Dividend ETF (WKLY) could fit the bill.
This new product from Social Finance Inc., a San Francisco-based online lender and personal finance site better known as SoFI, tracks an index of large- and mid-cap companies in the U.S. and in overseas developed nations that meet criteria for dividend sustainability. Those criteria include paying regular dividends during the past 12 months and being forecasted to do so for the next 12 months, along with meeting payout ratio requirements.
The underlying SoFi Sustainable Dividend Index is weighted on a free-float market capitalization basis, with individual holdings capped at 5% of the portfolio at each quarterly rebalancing. The fund’s expense ratio is 0.49%.
If things go according to plan, the WKLY fund will make cash distributions every Thursday. No information was provided about the size of the weekly payout or the annualized yield investors can expect.
The SoFi Weekly Dividend ETF is marketed as the first equity ETF making weekly dividend payments. It’s the equity version of its sibling SoFi Weekly Income ETF (TGIF), an actively managed fund that launched last October to provide weekly income by investing in investment-grade and high-yield fixed-income securities. Those payouts have occurred every Friday at a rate of 0.05%, which would equate to 2.6% on an annual basis.
The TGIF product is managed by fixed-income shop Income Research + Management. It seeks to mitigate interest rate risk relative to longer-dated bonds by investing in securities with a duration of less than three years. The fund’s net expense ratio is 0.59%.
SoFi made a splash in April 2019 when it launched two funds with zero fees. The SoFi Select 500 ETF (SFY) and SoFi Next 500 ETF (SFYX) both have gross expense ratios of 0.19%, but those management fees are waived until at least June 30, 2021, meaning the net expense ratios remain at zero.
All told, SoFi has six ETFs with roughly $328 million in assets under management.