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Is Global X SuperDividend U.S. ETF (DIV) a Strong ETF Right Now?

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Launched on 03/11/2013, the Global X SuperDividend U.S. ETF (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?

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.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

The fund is managed by Global X Management. DIV has been able to amass assets over $293.77 M, making it one of the larger ETFs in the Style Box - All Cap Value. This particular fund 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

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.46%.

It has a 12-month trailing dividend yield of 16.58%.

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.

Looking at individual holdings, B&g Foods Inc accounts for about 2.93% of total assets, followed by General Mills Inc and Pattern Ener -A.

DIV's top 10 holdings account for about 26.85% of its total assets under management.

Performance and Risk

Year-to-date, the Global X SuperDividend U.S. ETF has lost about -51.61% so far, and is down about -44.89% over the last 12 months (as of 03/24/2020). DIV has traded between $11.17 and $24.05 in this past 52-week period.

DIV has a beta of 0.69 and standard deviation of 21.47% for the trailing three-year period, which makes the fund 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 $33.50 M in assets, Global X SuperDividend ETF has $456.84 M. 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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