Is Global X SuperDividend U.S. ETF (DIV) a Strong ETF Right Now?
The Global X SuperDividend U.S. ETF (DIV) made its debut on 03/11/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
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
The fund is managed by Global X Management, and has been able to amass over $716.59 million, which makes it one of the largest ETFs in the Style Box - All Cap Value. Before fees and expenses, this particular fund 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.
Annual operating expenses for DIV are 0.45%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 5.15%.
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 Consumer Staples sector, which is about 25.50% of the portfolio. Its Utilities and Real Estate round out the top three.
When you look at individual holdings, Equitrans Midstream Corp (ETRN) accounts for about 2.64% of the fund's total assets, followed by Cubesmart (CUBE) and Pfizer Inc (PFE).
Its top 10 holdings account for approximately 24.86% of DIV's total assets under management.
Performance and Risk
Year-to-date, the Global X SuperDividend U.S. ETF has added roughly 3.04% so far, and was up about 15.40% over the last 12 months (as of 04/12/2022). DIV has traded between $19.28 and $21.34 in this past 52-week period.
DIV has a beta of 1.09 and standard deviation of 26.84% 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) 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 $68.31 million in assets, Global X SuperDividend ETF has $867.81 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.
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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Global X SuperDividend U.S. ETF (DIV): ETF Research Reports
Pfizer Inc. (PFE) : Free Stock Analysis Report
CubeSmart (CUBE) : Free Stock Analysis Report
Global X SuperDividend ETF (SDIV): ETF Research Reports
WBI Power Factor High Dividend ETF (WBIY): ETF Research Reports
Equitrans Midstream Corporation (ETRN) : Free Stock Analysis Report
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