Is Global X SuperDividend U.S. ETF (DIV) a Strong ETF Right Now?
Smart Beta ETF report for DIV
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 Style Box - All Cap Value 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.
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.
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.
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
DIV is managed by Global X Management, and this fund has amassed over $675.06 million, which makes it one of the larger ETFs in the Style Box - All Cap Value. Before fees and expenses, DIV 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.
Annual operating expenses for DIV are 0.45%, which makes it on par with most peer products in the space.
DIV's 12-month trailing dividend yield is 5.53%.
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.
For DIV, it has heaviest allocation in the Consumer Staples sector --about 23.10% of the portfolio --while Real Estate and Energy round out the top three.
Taking into account individual holdings, Holly Energy Partners Lp (HEP) accounts for about 2.69% of the fund's total assets, followed by Cubesmart (CUBE) and Iron Mountain Inc (IRM).
Its top 10 holdings account for approximately 23.24% of DIV's total assets under management.
Performance and Risk
The ETF has gained about 22.83% so far this year and was up about 36.98% in the last one year (as of 09/09/2021). In the past 52-week period, it has traded between $14.56 and $20.57.
The fund has a beta of 1.16 and standard deviation of 26.86% for the trailing three-year period, which makes DIV a medium risk choice in this particular 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 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 $64.88 million in assets, Global X SuperDividend ETF has $964.94 million. WBIY has an expense ratio of 0.70% and SDIV charges 0.59%.
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.
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
Iron Mountain Incorporated (IRM): Free Stock Analysis Report
CubeSmart (CUBE): Free Stock Analysis Report
Holly Energy Partners, L.P. (HEP): Free Stock Analysis Report
Global X SuperDividend ETF (SDIV): ETF Research Reports
WBI Power Factor High Dividend ETF (WBIY): ETF Research Reports
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