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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Global X Management. It has amassed assets over $653.75 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.45% for DIV, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 5.50%.
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.
DIV's heaviest allocation is in the Energy sector, which is about 20% of the portfolio. Its Financials and Real Estate round out the top three.
When you look at individual holdings, B&g Foods Inc (BGS) accounts for about 2.27% of the fund's total assets, followed by Avista Corp (AVA) and Altria Group Inc (MO).
Its top 10 holdings account for approximately 21.56% of DIV's total assets under management.
Performance and Risk
The ETF has added about 5.82% and was up about 17.65% so far this year and in the past one year (as of 03/18/2025), respectively. DIV has traded between $16.53 and $19.32 during this last 52-week period.
The ETF has a beta of 1.04 and standard deviation of 14.26% for the trailing three-year period, making it a medium risk choice in the space. With about 52 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 $801.69 million in assets, Capital Group Dividend Growers ETF has $1.80 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
Altria Group, Inc. (MO) : Free Stock Analysis Report
Avista Corporation (AVA) : Free Stock Analysis Report
B&G Foods, Inc. (BGS) : Free Stock Analysis Report
Global X SuperDividend ETF (SDIV): ETF Research Reports
Capital Group Dividend Growers ETF (CGDG): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
