With a 30-day SEC yield of almost 5%, that might be enough to sway investors towards the Global X SuperDividend U.S. ETF (DIV), but it also presents a track record of monthly distributions that dates back eight years.
This is of particular importance when getting fixed income exposure, since investors can get easily enticed by the yield. However, getting sustainable monthly distributions presents a better proposition for fixed income investors looking to maintain yield over the long term.
That long-term maintenance could be beneficial, particularly if inflation is persistent. Even if the narrative of transitory, short-term inflation wins, getting quality exposure to dividends that can sustain themselves over time adds value to any portfolio.
As such, DIV represents a prime option for not only yield, but value. Getting value is necessary in today’s market environment where inflation, rising yields, and the pandemic are adding volatility to the stock market indexes.
Diversified Fixed Income Exposure to the U.S.
DIV not only gives yield, it also keeps it within the U.S. to help mute volatility. Consumer staples, utilities, and real estate top DIV’s holdings, giving the fund diversified sector exposure to dividend-paying stocks that can maintain those dividends over time.
Per its fund description, DIV seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx SuperDividend® U.S. Low Volatility Index. Its 30-day SEC yield of almost 5% (as of December 16, 2021) and its year-to-date gain of over 21% highlight the ETF’s dual benefits.
With its capital, the fund invests at least 80% of its total assets in the securities of the underlying 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 on a monthly basis and has made distributions each month for over seven years. With rates scheduled to rise in 2022 around the world, 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 in an effort to produce low volatility returns.
For more news, information, and strategy, visit the Thematic Investing Channel.