Making its debut on 03/11/2013, smart beta exchange traded fund Global X SuperDividend U.S. ETF (DIV) provides investors broad exposure to the Total Market (U.S.) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Global X Management. It has amassed assets over $445.62 M, making it one of the largest ETFs in the Total Market (U.S.) ETFs. DIV, 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
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.
Operating expenses on an annual basis are 0.45% for this ETF, which makes it one of the cheaper products in the space.
DIV's 12-month trailing dividend yield is 6.77%.
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, Amc Entertainment Hlds-Cl accounts for about 2.27% of the fund's total assets, followed by Altria Group Inc and Fortress Transportation &.
The top 10 holdings account for about 21.72% of total assets under management.
Performance and Risk
Year-to-date, the Global X SuperDividend U.S. ETF has added roughly 7.57% so far, and is up about 7.23% over the last 12 months (as of 03/28/2019). DIV has traded between $21.69 and $25.59 in this past 52-week period.
DIV has a beta of 0.60 and standard deviation of 9.09% 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.
Global X SuperDividend U.S. ETF 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 $119.41 M in assets, Global X SuperDividend ETF has $919.08 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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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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