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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?
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.
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.
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 $607.21 million, making 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 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
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 0.45% for DIV, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 7.40%.
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.
This ETF has heaviest allocation in the Energy sector - about 28.10% of the portfolio. Financials and Consumer Staples round out the top three.
When you look at individual holdings, Ny Comm Bancorp (NYCB - Free Report) accounts for about 2.69% of the fund's total assets, followed by Magellan Midstre and B&g Foods Inc (BGS - Free Report) .
The top 10 holdings account for about 23.84% of total assets under management.
Performance and Risk
Year-to-date, the Global X SuperDividend U.S. ETF has lost about -7.08% so far, and is down about -11.85% over the last 12 months (as of 08/29/2023). DIV has traded between $16.05 and $20.27 in this past 52-week period.
The ETF has a beta of 1.02 and standard deviation of 15.01% for the trailing three-year period, making it a medium risk choice in the space. With about 52 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 $58.59 million in assets, Global X SuperDividend ETF has $761.12 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?
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?
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.
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.
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 $607.21 million, making 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 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
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 0.45% for DIV, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 7.40%.
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.
This ETF has heaviest allocation in the Energy sector - about 28.10% of the portfolio. Financials and Consumer Staples round out the top three.
When you look at individual holdings, Ny Comm Bancorp (NYCB - Free Report) accounts for about 2.69% of the fund's total assets, followed by Magellan Midstre and B&g Foods Inc (BGS - Free Report) .
The top 10 holdings account for about 23.84% of total assets under management.
Performance and Risk
Year-to-date, the Global X SuperDividend U.S. ETF has lost about -7.08% so far, and is down about -11.85% over the last 12 months (as of 08/29/2023). DIV has traded between $16.05 and $20.27 in this past 52-week period.
The ETF has a beta of 1.02 and standard deviation of 15.01% for the trailing three-year period, making it a medium risk choice in the space. With about 52 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 $58.59 million in assets, Global X SuperDividend ETF has $761.12 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.