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Is Global X SuperDividend U.S. ETF (DIV) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Global X SuperDividend U.S. ETF (DIV - Free Report) debuted on 03/11/2013, and offers broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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 managed by Global X Management, and has been able to amass over $436.53 million, which makes it one of the larger ETFs in the Style Box - All Cap Value. This particular fund, 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's 12-month trailing dividend yield comes in at 9.96%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector - about 24.60% of the portfolio. Consumer Staples and Financials round out the top three.
Taking into account individual holdings, B&g Foods Inc (BGS - Free Report) accounts for about 6.81% of the fund's total assets, followed by Kraft Heinz Co/the (KHC - Free Report) and General Mills Inc (GIS - Free Report) .
Its top 10 holdings account for approximately 34.53% of DIV's total assets under management.
Performance and Risk
The ETF has lost about -27.40% and is down about -19.56% so far this year and in the past one year (as of 08/13/2020), respectively. DIV has traded between $11.17 and $23.98 during this last 52-week period.
The ETF has a beta of 1.13 and standard deviation of 25.91% for the trailing three-year period, making it a medium risk choice in the space. With about 45 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 $43.76 million in assets, Global X SuperDividend ETF has $656.65 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?
A smart beta exchange traded fund, the Global X SuperDividend U.S. ETF (DIV - Free Report) debuted on 03/11/2013, and offers broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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 managed by Global X Management, and has been able to amass over $436.53 million, which makes it one of the larger ETFs in the Style Box - All Cap Value. This particular fund, 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's 12-month trailing dividend yield comes in at 9.96%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Energy sector - about 24.60% of the portfolio. Consumer Staples and Financials round out the top three.
Taking into account individual holdings, B&g Foods Inc (BGS - Free Report) accounts for about 6.81% of the fund's total assets, followed by Kraft Heinz Co/the (KHC - Free Report) and General Mills Inc (GIS - Free Report) .
Its top 10 holdings account for approximately 34.53% of DIV's total assets under management.
Performance and Risk
The ETF has lost about -27.40% and is down about -19.56% so far this year and in the past one year (as of 08/13/2020), respectively. DIV has traded between $11.17 and $23.98 during this last 52-week period.
The ETF has a beta of 1.13 and standard deviation of 25.91% for the trailing three-year period, making it a medium risk choice in the space. With about 45 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 $43.76 million in assets, Global X SuperDividend ETF has $656.65 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.