A smart beta exchange traded fund, the Global X SuperDividend U.S. ETF (DIV) 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 traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Global X Management, DIV has amassed assets over $639.92 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.
Annual operating expenses for this ETF are 0.45%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 5.69%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For DIV, it has heaviest allocation in the Energy sector --about 23.70% of the portfolio --while Real Estate and Utilities round out the top three.
Looking at individual holdings, Virtu Financia-A (VIRT) accounts for about 4.22% of total assets, followed by Kinder Morgan Inc (KMI) and Spire Inc (SR).
DIV's top 10 holdings account for about 28.85% of its total assets under management.
Performance and Risk
The ETF has added about 0.83% so far this year and is up about 12.24% in the last one year (as of 01/16/2025). In the past 52-week period, it has traded between $16.31 and $19.32.
The fund has a beta of 1.05 and standard deviation of 14.34% 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.
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) tracks Solactive Global SuperDividend Index and the Capital Group Dividend Growers ETF (CGDG) tracks ----------------------------------------. Global X SuperDividend ETF has $762.96 million in assets, Capital Group Dividend Growers ETF has $1.48 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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Get it free >>Global X SuperDividend U.S. ETF (DIV): ETF Research Reports
Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report
Spire Inc. (SR) : Free Stock Analysis Report
Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report
Global X SuperDividend ETF (SDIV): ETF Research Reports
Capital Group Dividend Growers ETF (CGDG): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
