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?
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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 $498.07 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.46%.
It's 12-month trailing dividend yield comes in at 8.29%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector - about 24.10% of the portfolio. Energy and Financials round out the top three.
Looking at individual holdings, B&g Foods Inc (BGS) accounts for about 7.02% of total assets, followed by Kraft Heinz Co/the (NASDAQ:KHC) and General Mills Inc (NYSE:GIS).
The top 10 holdings account for about 34.48% of total assets under management.
Performance and Risk
Year-to-date, the Global X SuperDividend U.S. ETF has lost about -23.22% so far, and is down about -22.79% over the last 12 months (as of 12/25/2020). DIV has traded between $11.17 and $23.98 in this past 52-week period.
The fund has a beta of 1.14 and standard deviation of 26.64% for the trailing three-year period, which makes DIV a medium risk choice in this particular 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 $43.40 million in assets, Global X SuperDividend ETF has $766.31 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.
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
General Mills, Inc. (GIS): Free Stock Analysis Report
B&G Foods, Inc. (BGS): Free Stock Analysis Report
Global X SuperDividend ETF (SDIV): ETF Research Reports
The Kraft Heinz Company (KHC): Free Stock Analysis Report
WBI Power Factor High Dividend ETF (WBIY): ETF Research Reports
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