The GLBL-X SPRDV US (DIV) was launched on 03/11/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Total Market (U.S.) ETFs category of the U.S. equity 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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
DIV is managed by Global X Management, and this fund has amassed over $406.98 M, which makes it one of the larger ETFs in the Total Market (U.S.) ETFs. Before fees and expenses, DIV 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.45% for this ETF, which makes it on par with most peer products in the space.
DIV's 12-month trailing dividend yield is 6%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Brinker International Inc accounts for about 3.04% of the fund's total assets, followed by Universal Corp/va and National Cinemedia Inc.
DIV's top 10 holdings account for about 23.51% of its total assets under management.
Performance and Risk
The ETF has added about 1.45% so far this year and was up about 5.79% in the last one year (as of 07/17/2018). In the past 52-week period, it has traded between $23.53 and $25.83.
The ETF has a beta of 0.57 and standard deviation of 10.87% for the trailing three-year period, making it a medium choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
GLBL-X SPRDV US is a reasonable option for investors seeking to outperform the Total Market (U.S.) ETFs 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 $52.90 M in assets, Global X SuperDividend ETF has $965.60 M. 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 Total Market (U.S.) ETFs.
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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GLBL-X SPRDV US (DIV): ETF Research Reports
GLBL-X SUPERDIV (SDIV): ETF Research Reports
WBI-PWR FAC HD (WBIY): ETF Research Reports
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