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

Sweta Killa
·4 min read

Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Global X SuperDividend U.S. ETF (DIV) is a smart beta exchange traded fund launched on 03/11/2013.

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.

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.

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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.

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

DIV is managed by Global X Management, and this fund has amassed over $589.74 M, which makes it one of the largest ETFs in the Style Box - All Cap Value. 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

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Annual operating expenses for this ETF are 0.45%, making it on par with most peer products in the space.

DIV's 12-month trailing dividend yield is 7.88%.

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.

When you look at individual holdings, Compass Diversif accounts for about 3.24% of the fund's total assets, followed by Buckle Inc/the and Southern Co/the.

Its top 10 holdings account for approximately 27.78% of DIV's total assets under management.

Performance and Risk

So far this year, DIV has lost about -1.11%, and is up about 6.10% in the last one year (as of 02/07/2020). During this past 52-week period, the fund has traded between $21.83 and $24.35.

DIV has a beta of 0.61 and standard deviation of 9.20% 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 $91.65 M in assets, Global X SuperDividend ETF has $948.12 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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