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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) was launched on 03/11/2013, and is a smart beta exchange traded fund designed to offer 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.
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.
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. DIV has been able to amass assets over $693.87 million, making it one of the larger ETFs in the Style Box - All Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the INDXX SuperDividend U.S. Low Volatility Index.
The INDXX SuperDividend U.S. 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 DIV are 0.45%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 5.30%.
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.
Representing 23.60% of the portfolio, the fund has heaviest allocation to the Consumer Staples sector; Real Estate and Energy round out the top three.
When you look at individual holdings, Equitrans Midstream Corp (ETRN - Free Report) accounts for about 2.64% of the fund's total assets, followed by Cubesmart (CUBE - Free Report) and Pfizer Inc (PFE - Free Report) .
DIV's top 10 holdings account for about 24.86% of its total assets under management.
Performance and Risk
Year-to-date, the Global X SuperDividend U.S. ETF has lost about -1.80% so far, and is up about 19.50% over the last 12 months (as of 02/08/2022). DIV has traded between $18.16 and $21.30 in this past 52-week period.
The ETF has a beta of 1.10 and standard deviation of 26.73% for the trailing three-year period, making it a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
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 $66.57 million in assets, Global X SuperDividend ETF has $925.01 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) was launched on 03/11/2013, and is a smart beta exchange traded fund designed to offer 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.
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.
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. DIV has been able to amass assets over $693.87 million, making it one of the larger ETFs in the Style Box - All Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the INDXX SuperDividend U.S. Low Volatility Index.
The INDXX SuperDividend U.S. 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 DIV are 0.45%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 5.30%.
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.
Representing 23.60% of the portfolio, the fund has heaviest allocation to the Consumer Staples sector; Real Estate and Energy round out the top three.
When you look at individual holdings, Equitrans Midstream Corp (ETRN - Free Report) accounts for about 2.64% of the fund's total assets, followed by Cubesmart (CUBE - Free Report) and Pfizer Inc (PFE - Free Report) .
DIV's top 10 holdings account for about 24.86% of its total assets under management.
Performance and Risk
Year-to-date, the Global X SuperDividend U.S. ETF has lost about -1.80% so far, and is up about 19.50% over the last 12 months (as of 02/08/2022). DIV has traded between $18.16 and $21.30 in this past 52-week period.
The ETF has a beta of 1.10 and standard deviation of 26.73% for the trailing three-year period, making it a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
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 $66.57 million in assets, Global X SuperDividend ETF has $925.01 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.