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 traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Global X Management. It has amassed assets over $520.38 million, making it one of the largest 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.46% for DIV, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 7.62%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
DIV's heaviest allocation is in the Energy sector, which is about 24.90% of the portfolio. Its Consumer Staples and Financials round out the top three.
Looking at individual holdings, B&g Foods Inc (
BGS Quick Quote BGS - Free Report) accounts for about 7.02% of 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 gained about 5.04% so far this year and is down about -20.03% in the last one year (as of 01/18/2021). In the past 52-week period, it has traded between $11.17 and $23.94.
The ETF has a beta of 1.14 and standard deviation of 26.67% 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 $46.06 million in assets, Global X SuperDividend ETF has $779.46 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.