ETF Spotlight on the Global X SuperDividend ETF (NYSEArca: SDIV), part of an ongoing series.
Assets: $70.1 million.
Objective: The Global X SuperDividend ETF tries to reflect the performance of the Solactive Global SuperDividend Index, which follows the performance of 100 equally weighted companies that rank among the highest dividend issuers in the world.
Holdings: Top holdings include: Navitas Ltd. 1.4%, Ship Financ Intl. 1.3%, Provident Financial Plc. 1.3%, Invesco Mortgage REIT 1.2% and Starhub Ltd. 1.2%.
What You Should Know:
- Global X Funds sponsors the ETF.
- SDIV has an expense ratio of 1.14%.
- The fund has 100 holdings and the top ten make up 12.1% of the overall portfolio.
- Sector allocations include: basic materials 1.1%, consumer cyclical 10.2%, financial services 20.4%, real estate 25.1%, telecommunication services 17.1%, energy 3.0%, industrials 7.2%, tech 3.3%, consumer defensive 3.4%, health care 2.1% and utilities 7.2%.
- Country allocations include: U.S. 32.2%, Australia 24.6%, U.K. 7.7%, Canada 6.0%, Singapore 5.2%, New Zealand 2.2%, Poland 2.1%, China 2.0%, Brazil 1.9%, Spain 1.9% and other 14.2%.
- SDIV has a yield of 9.24%.
- The fund is up 5.6% over the last month down 4% over the past three months and up 5.5% year-to-date.
- “The risk of investing in high-yield equities is the possibility that the dividends are not sustainable,” according to Morningstar analyst Patricia Oey. “The provider of this fund’s underlying index will screen, once a quarter, for companies that might cut their dividend cuts.”
- “At the end of the year, fund companies provide tax documents, which will include foreign taxes paid, which investors can elect to take as a tax credit or as an itemized deduction, subject to certain rules. We recommend investors consult with their tax advisors for additional details,” Oey added.
- Since the fund also holds REITs, investors should note that REITs distributions are not considered qualified dividends.
The Latest News:
- “Cheap is another angle on risk, and right now the yields are better in the foreign dividend-paying stocks than in the domestics,” Russel Kinnel, director of fund research at investment researcher Morningstar Inc., said in a MarketWatch article. “If you can get much more generous yields overseas — and you are an investor who is determined to get some income — it makes sense to look there, provided you can find the values amid the risks and get past the obvious cautions.”
- “There are some funds that expose you to the higher dividends of Europe and Asia and emerging markets but in a less-risky, more-predictable way,” Kinnel added. “Even in a less-risky fund, you need to realize that this is still a step up the risk scale. The dividends will give you some downside protection, but if you’re not going to be able to sleep at night if you’re invested internationally, then don’t even think about going there.”
Global X SuperDividend ETF
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.