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Is Global X SuperDividend U.S. ETF (DIV) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Global X SuperDividend U.S. ETF (DIV - Free Report) is a smart beta exchange traded fund launched on 03/11/2013.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Global X Management, and has been able to amass over $683.78 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 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.45%.
The fund has a 12-month trailing dividend yield of 6.57%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
DIV's heaviest allocation is in the Energy sector, which is about 19.10% of the portfolio. Its Utilities and Consumer Staples round out the top three.
Looking at individual holdings, Sabine Royalty Trust (SBR - Free Report) accounts for about 3.81% of total assets, followed by Gilead Sciences Inc (GILD - Free Report) and Usa Compression (USAC - Free Report) .
The top 10 holdings account for about 26.74% of total assets under management.
Performance and Risk
The ETF has gained about 1.69% and is down about -0.50% so far this year and in the past one year (as of 02/21/2023), respectively. DIV has traded between $17.61 and $21.67 during this last 52-week period.
The ETF has a beta of 1.01 and standard deviation of 27.98% for the trailing three-year period, making it 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 an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $83.14 million in assets, Global X SuperDividend ETF has $800.21 million. WBIY has an expense ratio of 0.70% and SDIV charges 0.58%.
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?
Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Global X SuperDividend U.S. ETF (DIV - Free Report) is a smart beta exchange traded fund launched on 03/11/2013.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Global X Management, and has been able to amass over $683.78 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 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.45%.
The fund has a 12-month trailing dividend yield of 6.57%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
DIV's heaviest allocation is in the Energy sector, which is about 19.10% of the portfolio. Its Utilities and Consumer Staples round out the top three.
Looking at individual holdings, Sabine Royalty Trust (SBR - Free Report) accounts for about 3.81% of total assets, followed by Gilead Sciences Inc (GILD - Free Report) and Usa Compression (USAC - Free Report) .
The top 10 holdings account for about 26.74% of total assets under management.
Performance and Risk
The ETF has gained about 1.69% and is down about -0.50% so far this year and in the past one year (as of 02/21/2023), respectively. DIV has traded between $17.61 and $21.67 during this last 52-week period.
The ETF has a beta of 1.01 and standard deviation of 27.98% for the trailing three-year period, making it 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 an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $83.14 million in assets, Global X SuperDividend ETF has $800.21 million. WBIY has an expense ratio of 0.70% and SDIV charges 0.58%.
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.