Lackluster yields in today’s fixed income environment are pointing advisors toward a fund that can search the globe for the best yields. Enter the Global X SuperDividend ETF (SDIV).
A global economic recovery should provide additional tailwinds for dividend-producing equities.
“What has very quietly happened is dividends have outperformed the S&P on an annualized basis by just as much as growth outperformed value in the prior year,” said Steve Chiavarone, portfolio manager at Federated Hermes. “This is a story that has a lot of legs.”
“An instrument that pays a regular payment, whether that’s a coupon bond or a dividend-paying stock, has a shorter duration than a growth stock or a noncoupon-paying bond, and in an environment of rising rates, you want to be shorter duration,” said Chiavarone. “This is our highest conviction call. We think dividends have a long way to run here.”
Whether developed or emerging markets, SDIV scours the world for companies that are offering the highest dividends. Furthermore, SDIV minimizes risk by utilizing an equal-weight approach.
SDIV seeks investment results that correspond generally 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 gives investors:
- High Income Potential: 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 9 years.
- Global Exposure: Investing in equities from around the globe can help diversify both geographic and interest rate exposure.
All Eyes on the Fed
As jobless claims beat expectations, more eyes will be on the Fed with regard to a potential shift in interest rates.
“The U.S. Department of Labor said there were 406,000 initial jobless claims last week, below the 425,00 expected by economists, according to Dow Jones. In the week prior, jobless claims reached a fresh pandemic-era low of 444,000,” a CNBC report said.
“Investors are watching jobs data closely, as the Federal Reserve has said it will wait for a fuller recovery in the labor market before it looks at tapering its asset purchases and raising interest rates,” the report added.
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