The Global X SuperDividend Alternatives ETF (NasdaqGM: ALTY) can help exchange traded fund investors diversify away from traditional assets and generate attractive yields along the way.
ALTY tries to reflect the performance of the Indxx SuperDividend Alternatives Index, which is comprised of a group of high-yielding alternative assets like master limited partnerships, infrastructure companies, real estate investment trusts, mortgage REITs, emerging market debt, business development companies, private equity, asset and mortgage backed securities and option-writing strategies.
Specifically, the ETF includes a 31.1% tilt toward REITs, along with 20.1% BDCs and private equity, 11.4% covered call strategies, 11.3% carry trade and EM debt, 11.0% mortgage and asset backed securities, 8.4% infrastructure and 6.8% MLPs.
Alternative investments are seen as a portfolio diversifier because of their low correlation to standard assets. These alternative assets may zig as a traditional portfolio of stocks and bonds zag, potentially providing investors with another layer of diversification to help smooth out volatility in the markets.
ALTY has more or less kept up with the broader equities market during the recent selling pressure. Year-to-date, the alternative dividend ETF was down 4.3% while the S&P 500 index was 4.2% lower.
Moreover, ALTY’s portfolio of alternative assets generate attractive yields. The ETF shows a 11.8% 30-day SEC yield and income-dependent investors may enjoy a steady monthly distribution.