Equity ETF Offers Weekly Dividend Payout
Today, SoFi rolled out a fund designed to complement the fixed income-focused SoFi Weekly Income ETF (TGIF) it launched last year. The SoFi Weekly Dividend ETF (WKLY) tracks the SoFi Sustainable Dividend Index, and like TGIF, the new ETF makes weekly dividend payments to investors.
WKLY comes with an expense ratio of 0.49% and lists on the NYSE Arca.
“This now gives you the building blocks to construct a more diversified weekly distributing portfolio with the amount of equity and fixed income that you think is appropriate for your situation,” a SoFi spokesperson said, referring to the complementary relationship between TGIF and WKLY and noting that the two ETFs could be used to construct a typical 60/40 portfolio.
The index underlying WKLY targets developed market large- and midcap companies that have solid histories of paying dividends. Beyond the usual size and liquidity requirements, eligible stocks are evaluated based on criteria like dividend sustainability, payout ratio, debt/equity ratio, price return and dividend yield, the prospectus says.
The criteria are designed not only to highlight companies with at least five years of dividend payments but also to weed out those at risk of cutting their dividend payments, according to the press release.
The fund’s methodology strips out a lot of technology companies, which tend not to pay dividends, in favor of firms like Verizon, Costco, Procter & Gamble and J.P. Morgan, according to the issuer’s spokesperson. He noted that the fund tends to have more of a focus on consumer staples and financials than other more growth-oriented products offered by SoFi.
SoFi entered the ETF market in 2019 with a focus on younger cohorts of investors who are highly educated, with high income and good credit.
Contact Heather Bell at hbell@etf.com
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