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Is Global X SuperDividend U.S. ETF (DIV) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Global X SuperDividend U.S. ETF (DIV - Free Report) debuted on 03/11/2013, and offers broad exposure to the Style Box - All Cap Value 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.
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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Global X Management. It has amassed assets over $632.16 million, making it one of the larger ETFs in the Style Box - All Cap Value. This particular fund, before fees and expenses, 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.45% for DIV, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 6.13%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 20% of the portfolio, the fund has heaviest allocation to the Energy sector; Real Estate and Utilities round out the top three.
Taking into account individual holdings, Virtu Financia-A (VIRT - Free Report) accounts for about 3.19% of the fund's total assets, followed by Telephone & Data (TDS - Free Report) and Natl Health Investors Inc (NHI - Free Report) .
DIV's top 10 holdings account for about 25.34% of its total assets under management.
Performance and Risk
The ETF return is roughly 9.86% and it's up approximately 16.44% so far this year and in the past one year (as of 09/12/2024), respectively. DIV has traded between $15.43 and $18.49 during this last 52-week period.
DIV has a beta of 1.05 and standard deviation of 14.31% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 53 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.
Global X SuperDividend ETF (SDIV - Free Report) tracks Solactive Global SuperDividend Index and the Capital Group Dividend Growers ETF (CGDG - Free Report) tracks ----------------------------------------. Global X SuperDividend ETF has $776.88 million in assets, Capital Group Dividend Growers ETF has $1.17 billion. SDIV has an expense ratio of 0.58% and CGDG charges 0.47%.
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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Is Global X SuperDividend U.S. ETF (DIV) a Strong ETF Right Now?
A smart beta exchange traded fund, the Global X SuperDividend U.S. ETF (DIV - Free Report) debuted on 03/11/2013, and offers broad exposure to the Style Box - All Cap Value 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.
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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Global X Management. It has amassed assets over $632.16 million, making it one of the larger ETFs in the Style Box - All Cap Value. This particular fund, before fees and expenses, 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.45% for DIV, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 6.13%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 20% of the portfolio, the fund has heaviest allocation to the Energy sector; Real Estate and Utilities round out the top three.
Taking into account individual holdings, Virtu Financia-A (VIRT - Free Report) accounts for about 3.19% of the fund's total assets, followed by Telephone & Data (TDS - Free Report) and Natl Health Investors Inc (NHI - Free Report) .
DIV's top 10 holdings account for about 25.34% of its total assets under management.
Performance and Risk
The ETF return is roughly 9.86% and it's up approximately 16.44% so far this year and in the past one year (as of 09/12/2024), respectively. DIV has traded between $15.43 and $18.49 during this last 52-week period.
DIV has a beta of 1.05 and standard deviation of 14.31% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 53 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.
Global X SuperDividend ETF (SDIV - Free Report) tracks Solactive Global SuperDividend Index and the Capital Group Dividend Growers ETF (CGDG - Free Report) tracks ----------------------------------------. Global X SuperDividend ETF has $776.88 million in assets, Capital Group Dividend Growers ETF has $1.17 billion. SDIV has an expense ratio of 0.58% and CGDG charges 0.47%.
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.