Launched on 03/11/2013, the Global X SuperDividend U.S. ETF (DIV) is a smart beta exchange traded fund offering broad exposure to the Total Market (U.S.) ETFs 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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
DIV is managed by Global X Management, and this fund has amassed over $441.07 M, which makes it one of the largest ETFs in the Total Market (U.S.) ETFs. Before fees and expenses, this particular fund 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
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.
Operating expenses on an annual basis are 0.45% for DIV, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 7.53%.
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.
Taking into account individual holdings, Amerigas Partners-Lp accounts for about 2.46% of the fund's total assets, followed by Usa Compression and Coty Inc-Cl A.
The top 10 holdings account for about 23.2% of total assets under management.
Performance and Risk
Year-to-date, the Global X SuperDividend U.S. ETF has added roughly 1.71% so far, and is down about -3.30% over the last 12 months (as of 06/06/2019). DIV has traded between $21.69 and $25.59 in this past 52-week period.
The fund has a beta of 0.61 and standard deviation of 9.20% for the trailing three-year period, which makes DIV a medium risk choice in this particular space. With about 56 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 $106.67 M in assets, Global X SuperDividend ETF has $895.17 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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
To read this article on Zacks.com click here.
Zacks Investment Research