Global X, the New York-based exchange-traded fund firm known for its niche strategies, rolled out a globally focused equity ETF targeting companies that pay attractive dividends, the latest in a growing field of securities that loom largely as the economy slows and investors look for income.
The Global X SuperDividend ETF (NYSEArca:SDIV) is based on the Solactive Global SuperDividend Index, provided by Germany-based Structured Solutions AG. The index tracks the performance of 100 equally weighted companies that rank among the highest dividend-yielding equity securities in the world, Global X said today in a press release. SDIV has an all-in annual expense ratio of 0.79 percent, of which 058 percent is a management fee. The other expeses include acquired-fund fees related to the business development companies in which the ETF invests.
The ETF joins a crowded field of funds competing for investor attention at a time when income-generating investments like dividend-paying stocks are looking relatively attractive. The stock market just made it through its fifth-straight week of losses, and the end of the Federal Reserve's quantitative easing could mean existing bond prices will be under pressure should yields start heading higher.
"In an environment where people are seeking monthly income, the SuperDividend ETF offers convenient access to 100 high-yielding companies around the globe through one security," Bruno del Ama, Global X's chief executive officer, said in the press release.
SDIV provides exposure to a number of industries, including REITs (22 percent); consumer discretionary stocks (16 percent); telecommunications (16 percent); financial services (10 percent); utilities (8 percent); banks (5 percent); consumer staples (5 percent); energy (5 percent); industrials (5 percent); insurance (3 percent); technology (3 percent); and health care (2 percent).
The new Global X ETF also offers global reach, in terms of both issuer and currency diversification. That exposure diversification includes 32 percent to the U.S., 24 percent to Australia, 10 percent to Great Britain, 6 percent to Canada and 4 percent to Singapore, among others.
Among the longstanding competing ETFs from major fund sponsors are the $6.32 billion Vanguard Dividend Appreciation ETF (NYSEArca:VIG), the $5.68 billion SPDR Dividend ETF (NYSEArca:SDY) and the $6.11 billion iShares Dow Jones Dividend Index Fund (NYSEArca:DVY). They have dividend yields ranging from just over 2 percent for VIG to around 3.3 percent for SDY and DVY.
Apart from SDIV, the latest addition to the world of dividend-focused ETFs, which came yesterday, was the Guggenheim ABC High Dividend ETF (NYSEArca:ABCS). It has an annual expense ratio of 0.65 percent and is based on the BNY Mellon ABC Index, according to a June 6 regulatory filing.
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