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Is Global X SuperDividend U.S. ETF (DIV) a Strong ETF Right Now?
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The Global X SuperDividend U.S. ETF (DIV - Free Report) made its debut on 03/11/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Global X Management, DIV has amassed assets over $670.67 million, making it one of the larger ETFs in the Style Box - All Cap Value. DIV seeks to match the performance of the INDXX SuperDividend U.S. Low Volatility Index before fees and expenses.
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.45%.
It's 12-month trailing dividend yield comes in at 5.40%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For DIV, it has heaviest allocation in the Consumer Staples sector --about 23.20% of the portfolio --while Real Estate and Energy round out the top three.
Looking at individual holdings, Cubesmart (CUBE - Free Report) accounts for about 2.78% of total assets, followed by Equitrans Midstream Corp (ETRN - Free Report) and Iron Mountain Inc (IRM - Free Report) .
DIV's top 10 holdings account for about 24.54% of its total assets under management.
Performance and Risk
The ETF has added roughly 25.66% and it's up approximately 25.06% so far this year and in the past one year (as of 12/08/2021), respectively. DIV has traded between $16.73 and $20.78 during this last 52-week period.
DIV has a beta of 1.13 and standard deviation of 26.92% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 50 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 $64.11 million in assets, Global X SuperDividend ETF has $909.95 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?
The Global X SuperDividend U.S. ETF (DIV - Free Report) made its debut on 03/11/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Global X Management, DIV has amassed assets over $670.67 million, making it one of the larger ETFs in the Style Box - All Cap Value. DIV seeks to match the performance of the INDXX SuperDividend U.S. Low Volatility Index before fees and expenses.
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.45%.
It's 12-month trailing dividend yield comes in at 5.40%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For DIV, it has heaviest allocation in the Consumer Staples sector --about 23.20% of the portfolio --while Real Estate and Energy round out the top three.
Looking at individual holdings, Cubesmart (CUBE - Free Report) accounts for about 2.78% of total assets, followed by Equitrans Midstream Corp (ETRN - Free Report) and Iron Mountain Inc (IRM - Free Report) .
DIV's top 10 holdings account for about 24.54% of its total assets under management.
Performance and Risk
The ETF has added roughly 25.66% and it's up approximately 25.06% so far this year and in the past one year (as of 12/08/2021), respectively. DIV has traded between $16.73 and $20.78 during this last 52-week period.
DIV has a beta of 1.13 and standard deviation of 26.92% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 50 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 $64.11 million in assets, Global X SuperDividend ETF has $909.95 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.