There’s a defensive approach to rising interest rates and there’s an offensive one — beating them at their own game with more yield.
Global X has three options to get supercharged yields if fixed income investors are willing to take on more credit risk. First up, there’s the Global X Super Dividend REIT ETF (SRET), which focuses on dividends provided by real estate investment trusts (REITs).
The fund seeks investment results that correspond generally to the price and yield performance of the Solactive Global SuperDividend REIT Index, which tracks the performance of REITs that rank among the highest-yielding REITs globally, as determined by Solactive AG, the provider of the underlying index.
Highlights of SRET:
- High income potential: SRET accesses 30 of the highest-yielding REITs in the world, potentially increasing a portfolio’s yield.
- Monthly distributions: SRET has made monthly distributions for seven years running.
- Global exposure: SRET invests in REITs from around the globe, which can help diversify both geographic and interest rate exposure.
2 Additional Options Via Dividends
Two additional options to consider that provide dividend income are the Global X SuperDividend U.S. ETF (DIV) and the Global X SuperDividend ETF (SDIV). Of the two options, DIV keeps dividends within the safer confines of U.S. debt, which might be a safer play given the current market uncertainty regarding a recession.
Per its fund description, DIV seeks to provide investment results that generally correspond to the price and yield performance, before fees and expenses, of the Indxx SuperDividend® U.S. Low Volatility Index. The underlying index tracks the performance of 50 equally weighted common stocks, including Master Limited Partnerships (MLPs) and Real Estate Investment Trusts (REITs), that rank among the highest dividend-yielding equity securities in the United States.
DIV gives investors:
- High-income potential: DIV accesses 50 of the highest dividend-paying equities in the United States, potentially increasing a portfolio’s yield.
- Monthly distributions: DIV makes distributions every month and has made distributions each month for over seven years. With rates scheduled to rise in 2022 worldwide, this could translate to higher yields.
- Low volatility: DIV’s index methodology screens for equities that have exhibited low betas relative to the S&P 500 to produce low-volatility returns.
- A 30-day SEC yield of 4.80%.
Additional Yield Overseas
For bolder investors willing to extract additional yield in lieu of more risk, there are options for dividend-producing equities overseas with SDIV. The fund seeks investment results that generally correspond to the price and yield performance of the Solactive Global SuperDividend Index, which tracks the performance of 100 equally weighted companies that rank among the highest dividend-yielding equity securities in the world, including emerging market countries.
SDIV features:
- High income potential: Potentially increasing a portfolio’s yield, SDIV accesses 100 of the highest dividend-paying equities around the world.
- Monthly distributions: SDIV makes distributions on a monthly basis and has made distributions each month for over 10 years.
- Global exposure: Investing in equities from around the globe can help diversify geographic and interest rate exposure.
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