SoFi Weekly Dividend ETF
Ticker: WKLY
Exchange: NYSE Arca
Expense ratio: 0.49%
Ticker: WKLY
Exchange: NYSE Arca
Expense ratio: 0.49%
SUMMARY
Fund tracks an index of 100 stocks from around the world, and aims to pay dividend out to investors every Thursday. In practice, WKLY may at times have to pay out return-of-capital if it intends to pay out a constant amount throughout its lifetime. Its sister fund TGIF invests in fixed income and has paid out $0.05 a week since launch, yielding around 2.2% annualized.
Analysis
Great investment vehicle for those looking for a sustained weekly "income" for cash flow or comfort in seeing a weekly cash deposit into their brokerage accounts. Given the preponderance of $0 trades, investors have the option of re-investing the cash in WKLY, or other investment vehicles.
WKLY has a mid- to high- probability of success in gathering AUM, but will take time because:
1. Not a standard payout regime so target market will need to be formed rather than addressed
2. Advisors will require time to assimilate this payout regime in order to articulate and sell to their clients
Original filing date: February 19, 2021
Effective date: May 05, 2021
Listing Date: May 11, 2021
CUSIP: 886364736
Active: No
Index / Benchmark: SoFi Sustainable Dividend Index
Investment Objective:
Investment strategy section in Summary Prospectus is here.
Universe: Solactive GBS Developed Markets Large & Mid Cap USD Index
Methodology summary:
100 stocks from following methodology:
- Sustainable dividends: must have paid dividends in past 12 months and forecast to pay in next 12.
- Dividends must be at least 90% of dividends from 1 and 5 years previous.
- Must have positive payout ratio
- Drop companies in top 10% highest Debt/Equity ratio
- Drop companies in bottom 5% 1-year [share] price return
- Dividend yield must be at least 1.2x weighted average dividend yield of Universe stocks
If less than 100 stocks meet above requirements, go down list in universe based on dividend yield, until 100 is reached.
Individual stocks are capped at 5%.
Sectors are capped at 30%.
Constituents: 100
Adviser: Toroso Investments, LLC
Sub-Adviser: N/A
Portfolio Managers: Michael Venuto, Charles A. Ragauss
Administrator: Tidal ETF Services LLC/ Sub-Administrator:U.S. Bancorp Fund Services, LLC,
Fund accountant: U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services
Transfer agent: U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services
Custodian: U.S. Bank National Association
Distributor: Foreside Fund Services, LLC
Legal counsel: Godfrey & Kahn, S.C.
External accounting: Tait, Weller & Baker LLP
Prospectus is here.
MORE ETF HEARSAY
- LinkedIn: Henry Jim
- henry@etfhearsay.com
- Twitter: @ETFhearsay
SoFi Sustainable Dividend Index
The Index’s initial investible universe consists of all of the securities comprising the Solactive GBS Developed Markets Large & Mid Cap USD Index (the “GBS Universe”). The GBS Universe tracks the performance of the large- and mid-capitalization segment covering approximately the largest 85% of the free-float market capitalization in developed markets. To be eligible for inclusion in the Index at its next reconstitution, companies in the GBS Universe must meet the following eligibility requirements as of each selection day (“Selection Day”), which is 10 weekdays before the scheduled rebalance day:
•Liquidity. Companies must have a minimum average daily value traded (“ADV”) of $5 million USD over the previous 1-month and 6-months periods ($3.75 million USD for companies already included in the Index);
•Market Capitalization. Companies must have a minimum free-float market capitalization of $1 billion USD ($750 million USD for companies already included in the Index). Free float market capitalization measures a company’s market capitalization based on the number of outstanding shares for trading by the general public, rather than the total value of all of the company’s shares of stock;
•Dividend Sustainability. Companies must have a stable dividend payout in which they paid regular dividends during the previous twelve months and be forecasted to pay regular dividends during the next twelve months. In order to forecast the payment of regular dividends, the Index Provider utilizes a third-party service provider to provide consensus estimates of dividends per share. Companies must also have dividends per share over the previous twelve months which are higher or equal to 90% of the annual dividends per share paid out one year ago and five years ago;
•Payout Ratio. Companies must have a payout ratio between 0% and 100% (for companies already included in the Index, the payout ratio needs to be outside of this range for two consecutive Selection Days to be removed from the Index). The payout ratio is the percentage of earnings paid to shareholders in dividends, determined by the total amount of dividends paid out to shareholders per share during the last twelve months divided by the latest reported company earnings per share over the 12 months. The payout ratio is used to determine earnings paid to shareholders versus earnings retained by the company. A company with negative earnings will have a negative payout ratio;
•Debt/Equity Ratio. Companies must have a debt/equity ratio that is not in the top 10% of companies included in the GBS Universe in their respective sector;
•Price Return. Companies must have a 1-year price return that does not rank in the bottom 5% of companies included in the GBS Universe; and
•Dividend Yield. The companies that meet the eligibility requirements set forth above are included in the Index if they have a dividend yield over the past 12 months that is higher than 1.2x the weighted average dividend yield of the GBS Universe. “Dividend yield” is a financial ratio (dividend divided by price) that shows how much a company pays out in dividends each year relative to its stock price. If less than 100 companies meet the eligibility requirements to be included in the Index, additional companies are selected based on the highest dividend yield until the Index reaches 100 constituent companies.
The weight of each Index constituent is based on each constituent’s free-float market capitalization. Individual security weights are capped at 5%. Any excess weight is distributed among the securities within the same sector that have not yet reached the 5% cap on a pro-rata basis. Additionally, individual sector weights are capped at 30% with any excess weight distributed among the sectors that have not reached the 30% cap on a pro-rata basis.
The Index is rebalanced and reconstituted quarterly on the last business day of each February, May, August, and November based on data that is ten weekdays prior to the date of such rebalance and reconstitution.
As of April 14, 2021, the three largest Index constituents and their weights were as follows: JP Morgan Chase & Co., 4.47%; Procter & Gamble Co., 3.19%; and Nestle SA, 3.13%.
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