SoFi has come up with an interesting twist on the normal fixed-income ETF that may have a lot of appeal for income-starved investors. Today the firm launched the actively managed SoFi Weekly Income ETF (TGIF), a one-of-a-kind fund that provides investors with income distributions every Friday (thus the ticker).
TGIF comes with an expense ratio of 0.59% and lists on the NYSE Arca.
The fund invests in both investment-grade and high-yield debt with duration of less than three years. The subadvisor, Income Research + Management, will estimate the payments it expects to be able to distribute to investors so that a steady stream is provided throughout the year, with a larger payment at the end of the year.
The subadvisor uses fundamental analysis of issuers and securities in its bottom-up approach to investing, the prospectus notes.
SoFi targets younger investors, and the firm believes this product, with its weeky payout, will appeal to that demographic, as it will provide immediate rewards on their investments, encouraging long-term holding. However, TGIF also has potential appeal for older investors who may be more reliant on having a reliable income stream.
The issuer is still relatively new to the ETF space, having exploded onto the scene in April 2019 with the first zero-fee ETF. The SoFi Select 500 ETF (SFY) currently has roughly $111 million in assets under management and still has an expense ratio of 0.00%.
Contact Heather Bell at [email protected]