The Global X SuperDividend U.S. ETF (DIV) 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?
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.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of 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
Because the fund has amassed over $399.51 million, this makes it one of the larger ETFs in the Style Box - All Cap Value. DIV is managed by Global X Management. This particular fund, before fees and expenses, seeks to match the performance of the INDXX SuperDividend U.S. Low Volatility Index.
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
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.
Operating expenses on an annual basis are 0.46% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 11.62%.
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.
DIV's heaviest allocation is in the Energy sector, which is about 25.30% of the portfolio. Its Consumer Staples and Utilities round out the top three.
Taking into account individual holdings, B&g Foods Inc (BGS) accounts for about 5.23% of the fund's total assets, followed by Kraft Heinz Co/the (KHC) and General Mills Inc (GIS).
Its top 10 holdings account for approximately 30.89% of DIV's total assets under management.
Performance and Risk
Year-to-date, the Global X SuperDividend U.S. ETF has lost about -34.36% so far, and is down about -26.40% over the last 12 months (as of 06/30/2020). DIV has traded between $11.17 and $23.98 in this past 52-week period.
DIV has a beta of 1.14 and standard deviation of 25.65% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 46 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) tracks Solactive Power Factor High Dividend Index and the Global X SuperDividend ETF (SDIV) tracks Solactive Global SuperDividend Index. WBI Power Factor High Dividend ETF has $41.59 million in assets, Global X SuperDividend ETF has $618.81 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.
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Global X SuperDividend U.S. ETF (DIV): ETF Research Reports
General Mills, Inc. (GIS) : Free Stock Analysis Report
BG Foods, Inc. (BGS) : Free Stock Analysis Report
Global X SuperDividend ETF (SDIV): ETF Research Reports
The Kraft Heinz Company (KHC) : Free Stock Analysis Report
WBI Power Factor High Dividend ETF (WBIY): ETF Research Reports
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