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

Zacks Equity Research

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?

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.

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.

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.

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 sponsored by Global X Management. It has amassed assets over $547.56 M, making it one of the largest ETFs in the Style Box - All Cap Value. DIV 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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.45%.

The fund has a 12-month trailing dividend yield of 7.57%.

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.

When you look at individual holdings, Compass Diversif accounts for about 2.94% of the fund's total assets, followed by Pattern Ener -A and At&t Inc.

The top 10 holdings account for about 25.78% of total assets under management.

Performance and Risk

So far this year, DIV has added about 11.35%, and is up about 1.75% in the last one year (as of 11/11/2019). During this past 52-week period, the fund has traded between $21.69 and $24.69.

DIV has a beta of 0.59 and standard deviation of 9.27% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 48 holdings, it has more concentrated exposure than peers.

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 $96.36 M in assets, Global X SuperDividend ETF has $937.76 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 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
 
Global X SuperDividend ETF (SDIV): ETF Research Reports
 
WBI Power Factor High Dividend ETF (WBIY): ETF Research Reports
 
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