Launched on 03/11/2013, the Global X SuperDividend U.S. ETF (
DIV Quick Quote DIV - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Value category of the market. What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
DIV is managed by Global X Management, and this fund has amassed over $465.93 million, which makes it one of the larger ETFs in the Style Box - All Cap Value. Before fees and expenses, DIV 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.
DIV's 12-month trailing dividend yield is 8.76%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
DIV's heaviest allocation is in the Energy sector, which is about 23.30% of the portfolio. Its Consumer Staples and Financials round out the top three.
When you look at individual holdings, B&g Foods Inc (
BGS Quick Quote BGS - Free Report) accounts for about 7.02% of the fund's total assets, followed by Kraft Heinz Co/the ( KHC Quick Quote KHC - Free Report) and General Mills Inc ( GIS Quick Quote GIS - Free Report) .
DIV's top 10 holdings account for about 34.48% of its total assets under management.
Performance and Risk
The ETF has lost about -24.78% so far this year and is down about -22.73% in the last one year (as of 12/03/2020). In the past 52-week period, it has traded between $11.17 and $23.98.
The ETF has a beta of 1.14 and standard deviation of 26.59% for the trailing three-year period, making it a medium risk choice in the space. With about 48 holdings, it has more concentrated exposure than peers.
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 Quick Quote WBIY - Free Report) tracks Solactive Power Factor High Dividend Index and the Global X SuperDividend ETF ( SDIV Quick Quote SDIV - Free Report) tracks Solactive Global SuperDividend Index. WBI Power Factor High Dividend ETF has $43.14 million in assets, Global X SuperDividend ETF has $747.88 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.
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.