ETF Trends
ETF Trends

Global X is trying to capitalize on two popular themes in the investment world with its new exchange traded fund that tracks U.S. dividend payers with low share-price volatility.

On Tuesday, the Global X Superdividend U.S. ETF (NYSEArc: DIV) will begin trading. The new fund will try to reflect the performance of the INDXX SuperDividend U.S. Low Volatility Index, which is comprised of 50 U.S. companies with the highest dividend yields. DIV has a 0.45% expense ratio.

To be included in the underlying index, each constituent must have paid dividends consistently over the last two years, and the index also includes filters that excludes companies that are likely to reduce dividends. Additionally, securities will be required to have a beta less than 0.85 relative to the S&P 500 on the rebalance date – anything less than 1 suggests lower volatility than the overall market. [Low-Volatility ETFs are ‘The New Black’]

The fund’s holdings are equally weighted, with components such as Altria Group 2.0%, Ameren Corp 2.0%, American Capital Agency 2.0%, Annaly Capital Management 2.0% and Anworth Mortgage Asset 2.0%.

Sector allocations include REITs 24.0%, Utilities 24.0%, MLPs 18.0%, Telecom 12.0%, Consumer Staples 8.0%, Health Care 6.0%, Consumer Discretionary 4.0%, Industrials 2.0% and Technology 2.0%.

The fund is expected to pay out monthly dividends.

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