At a time when investors are thirsting for income, robo-advisor SoFi in partnership with Tidal ETF Trust has filed with the Securities and Exchange Commission to trade an actively managed fund that will provide investors weekly income.
The ETF, under the trading symbol TGIF, is SoFi’s first bond ETF and will invest primarily in U.S. investment-grade and high-yield bonds with a typical short to intermediate effective duration of less than three years.
Income Research + Management, along with Exponential ETFs, will serve as subadvisors with IR + M providing a bottom-up, fundamental approach to choosing individual bonds. Toroso Investments will serve as the ETF’s investment advisor.
The timing of the introduction, as well as the cost, of the niche ETF are unknown at this time and neither SoFI nor Tidal could comment on either because of the quiet period that follows SEC filings so we asked a few ETF experts for their opinions.
“TGIF is certainly a clever ticker and the weekly income distribution a novel concept in the realm of ETFs, but this strikes me as a bit gimmicky,” said Ben Johnson, director of global exchange-traded fund research at Morningstar. “Using the current 1.14% SEC yield on $IGSB as a crude proxy [the iShares Short-Term Corporate Bond ETF], a $10,000 investment would generate roughly $2.20/week (pre-tax). Many investors would hardly notice the weekly windfall in their accounts.”
Dave Nadig, chief investment officer at ETF Trends, agrees. “They likely still can’t get a yield over 2%, so I’m not sure how much “weekly payout” of that tiny yield is really going to move the needle for advisors. Love the ticker though (grin).”