All of us are used to dividend stocks being paid out on a quarterly basis. You need to get creative to have a portfolio with income every month. This led me to look into dividend stocks that pay dividends every month.
I found a few companies that paid dividends every month. Here is my post on 4 companies that pay dividends every month. I didn’t list all of them. Just the ones I liked the most.
The question here is what if monthly dividends are not enough. What are the choices available if you are looking for something that pays a dividend every month?
SoFi has done exactly that by creating two ETFs that pay a dividend every week.
What is SoFi?
SoFi is a relatively new fintech company that specializes in all things money. Their number one priority is to help you get your money right. So you can secure your financial future and live life on your terms. It doesn’t matter what kind of money trouble you have or what kind of money tool you are looking for. They have a solution for you.
Are you looking to consolidate credit card debt? They offer personal loans.
Are you in the market for a new home? They offer mortgages.
Are you looking to get your finances in order? They have SoFi Relay for budgeting.
They have a product for all of your money needs. If they don’t have a tool directly, then they have a partnership that will get the job done.
I first heard about SoFi a few years ago when a friend mentioned about refinancing and consolidating all of their student loan debt. Student loan refinancing was their first product and from there they introduced more products as time went by. They launched Mortgages in 2014 and SoFi invest in 2019.
While sofi has made products like an investing app, they have also dabbled in making some ETFs. They offer 6 ETFs as of now but I am going to look into 2 of them that have dividends paid out every week.
1. SoFi Weekly Income ETF (TGIF)
I can’t think of a better ticker name than TGIF that would suit this ETFs purpose. I couldn’t find any information whether it is named for Thank God it’s Friday but I think it’s safe to assume that’s the case. As the name suggests Dividends are paid out every week on Friday.
This fund invests in investment grade and high yield fixed income securities. That’s a difficult way of saying it invests in corporate debt and junk bonds. It is an actively managed fund with exposure to over 100 different bonds for diversification. Biggest holding as of March 31st 2021 is a Ford corporate debt that expires in April 2023.
Dividend Details
- Dividend: $0.05
- Annual Dividend: $2.60
- Dividend Yield: 2.46%
- Paid out: Weekly
This is a relatively new offering so there isn’t a long history for dividends. The first date of dividend payment is 10/07/2020.
Expenses
Every Mutual fund and ETF charges a fee to its shareholders to cover operating expenses. TGIF is no different. Since it is an actively managed fund, the fees are a bit higher than usual. TGIF’s expense ratio is 0.59%. That’s $5.90 for every $1000 invested in the fund over a span of the year.
2. SoFi Weekly Dividend ETF (WKLY)
This is the second one on the list. I like how they have named these ETFs in the most straightforward way possible. This one is even newer than the TGIF ETF. First day of trading was 5/11/2021.
The goal with this is the same in terms of paying out dividends every week but the investments are different. This fund is made up of the most consistent dividend paying companies throughout the world. I couldn’t find a list of the companies they have in their holdings. However they have some stringent criteria for the companies that’s in the fund. Market capitalization of $1 Billion, dividend payout ratio not exceeding 100%, Company has paid dividend the last year and is projected to pay dividend the coming 12 months.
Dividend Details
- Dividend: $0.02
- Annual Dividend Payout: $1.04
- Dividend Yield: 2.07%
- Paid out: Weekly
Expenses
Expense ratio for WKLY is 0.49%. It is a bit cheaper than TGIF but this is still expensive. The 0.49% expense ratio amounts to $4.90 for every $1000 invested in the fund for a year.
Effective Dividend Yield
The dividend yield you will find by a quick search of TGIF and WKLY shouldn’t be considered as the dividend yield you can expect. You will not see any difference in the payout into your brokerage account but the expense ratio has to be accounted for somewhere since that is a cost to you.
The way I would look at the effective dividend yield for funds like these is the Dividend yield – Expense ratio.
Should you buy it?
On a high level, there is a quick and easy method you can use to decide this. If you don’t have a lot of money to be well diversified and want to have weekly income, then TGIF and WKLY make a lot of sense for you.
This is a scenario where you are not looking at the dividend yield or the stock movement. A set it and forget mentality that will bring in income.
Now to the nitty gritty- this is the I care less about getting dividends every week.
WKLY is a diversified fund invested in dividend stocks. The 2% dividend yield is more than the S&P 500 dividend yield which is currently at 1.37%. so it’s definitely not slacking in that area. However, since this fund is invested in dividend stocks. You could look at the fund holdings and pick out individual stocks you want to own. Some of them will have a dividend yield higher than 2%. You can have the ones you want and ignore the ones you think are not good. You will be sacrificing some diversification in the process.
TGIF is a fund invested in corporate debt and high yield junk bonds. The 2.5% dividend yield is good and similar to WKLY is higher than the S&P 500 dividend yield. Again if you are not desperately looking for weekly income, you can pass on this and go for a dividend stock that pays better. Only reason I can think of adding TGIF is for the added diversification. I have no exposure to bonds and TGIF can help with that.