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A smart beta exchange traded fund, the SPDR S&P Global Dividend ETF (WDIV) debuted on 05/29/2013, and offers broad exposure to the World 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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. WDIV has been able to amass assets over $326.45 million, making it one of the average sized ETFs in the World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the S&P Global Dividend Aristocrats Index.
The S&P Global Dividend Aristocrats Index measures the performance of high dividend-yield companies included in the S&P Global BMI that have followed a managed-dividends policy of increasing or stable dividends for at least ten consecutive years.
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 this ETF are 0.40%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.74%.
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.
Looking at individual holdings, Keyera Corp. (KEY-CA) accounts for about 2.17% of total assets, followed by Exxon Mobil Corporation (XOM) and Smartcentres Real Estate Investment Trust (SRU.UT-CA).
Its top 10 holdings account for approximately 17.96% of WDIV's total assets under management.
Performance and Risk
The ETF has added about 14.79% so far this year and was up about 27.74% in the last one year (as of 08/11/2021). In the past 52-week period, it has traded between $51.98 and $71.40.
WDIV has a beta of 0.94 and standard deviation of 20.70% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 116 holdings, it effectively diversifies company-specific risk.
SPDR S&P Global Dividend ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares MSCI ACWI ETF (ACWI) tracks MSCI All Country World Index and the Vanguard Total World Stock ETF (VT) tracks FTSE Global All Cap Index. IShares MSCI ACWI ETF has $17.24 billion in assets, Vanguard Total World Stock ETF has $22.21 billion. ACWI has an expense ratio of 0.32% and VT charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World 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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SPDR S&P Global Dividend ETF (WDIV): ETF Research Reports
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
iShares MSCI ACWI ETF (ACWI): ETF Research Reports
Vanguard Total World Stock ETF (VT): ETF Research Reports
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