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Is Global X SuperDividend U.S. ETF (DIV) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Global X SuperDividend U.S. ETF (DIV - Free Report) is a smart beta exchange traded fund launched on 03/11/2013.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Global X Management. It has amassed assets over $416.30 million, making it one of the larger ETFs in the Style Box - All Cap Value. DIV, before fees and expenses, seeks to match the performance of the INDXX SuperDividend U.S. Low Volatility Index.
The INDXX SuperDividend US Low Volatility Index tracks the performance of 50 equally weighted common stocks, MLPs & REITs that rank among the highest dividend yielding equity securities in the US.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.46%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 10.94%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For DIV, it has heaviest allocation in the Energy sector --about 23.80% of the portfolio --while Consumer Staples and Utilities round out the top three.
Taking into account individual holdings, B&g Foods Inc (BGS - Free Report) accounts for about 5.79% of the fund's total assets, followed by Kraft Heinz Co/the (KHC - Free Report) and General Mills Inc (GIS - Free Report) .
DIV's top 10 holdings account for about 32.22% of its total assets under management.
Performance and Risk
So far this year, DIV has lost about -32%, and is down about -24.85% in the last one year (as of 07/22/2020). During this past 52-week period, the fund has traded between $11.17 and $23.98.
DIV has a beta of 1.13 and standard deviation of 25.86% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 47 holdings, it has more concentrated exposure than peers.
Alternatives
Global X SuperDividend U.S. ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
WBI Power Factor High Dividend ETF (WBIY - Free Report) tracks Solactive Power Factor High Dividend Index and the Global X SuperDividend ETF (SDIV - Free Report) tracks Solactive Global SuperDividend Index. WBI Power Factor High Dividend ETF has $43.11 million in assets, Global X SuperDividend ETF has $648.66 million. WBIY has an expense ratio of 0.70% and SDIV charges 0.59%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Global X SuperDividend U.S. ETF (DIV) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Global X SuperDividend U.S. ETF (DIV - Free Report) is a smart beta exchange traded fund launched on 03/11/2013.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Global X Management. It has amassed assets over $416.30 million, making it one of the larger ETFs in the Style Box - All Cap Value. DIV, before fees and expenses, seeks to match the performance of the INDXX SuperDividend U.S. Low Volatility Index.
The INDXX SuperDividend US Low Volatility Index tracks the performance of 50 equally weighted common stocks, MLPs & REITs that rank among the highest dividend yielding equity securities in the US.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.46%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 10.94%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For DIV, it has heaviest allocation in the Energy sector --about 23.80% of the portfolio --while Consumer Staples and Utilities round out the top three.
Taking into account individual holdings, B&g Foods Inc (BGS - Free Report) accounts for about 5.79% of the fund's total assets, followed by Kraft Heinz Co/the (KHC - Free Report) and General Mills Inc (GIS - Free Report) .
DIV's top 10 holdings account for about 32.22% of its total assets under management.
Performance and Risk
So far this year, DIV has lost about -32%, and is down about -24.85% in the last one year (as of 07/22/2020). During this past 52-week period, the fund has traded between $11.17 and $23.98.
DIV has a beta of 1.13 and standard deviation of 25.86% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 47 holdings, it has more concentrated exposure than peers.
Alternatives
Global X SuperDividend U.S. ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
WBI Power Factor High Dividend ETF (WBIY - Free Report) tracks Solactive Power Factor High Dividend Index and the Global X SuperDividend ETF (SDIV - Free Report) tracks Solactive Global SuperDividend Index. WBI Power Factor High Dividend ETF has $43.11 million in assets, Global X SuperDividend ETF has $648.66 million. WBIY has an expense ratio of 0.70% and SDIV charges 0.59%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.