Dividend Fund Provides Superb Income

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

Dividend-bearing investments can be found in a variety of places, and there are many choices. Of course, it seemed inevitable to me that an exchange-traded fund (ETF) provider sooner or later would pool together the best worldwide dividend-paying companies into a single fund.

Sure enough, one fund company did. The result is Global X SuperDividend ETF (SDIV), a product of Global X Funds that offers a global perspective on investing in the stocks of high-yielding companies.

This fund holds 199 securities from around the world, equally weighted and chosen for their high and sustainable payouts. SDIV generally pays a consistent dividend on a monthly basis throughout the year at a roughly equal rate, but it can offer occasional bonuses or fluctuations. For example, 2014’s end-of-year dividend was about 30% larger than a normal monthly payment — a nice Christmas bonus.

SDIV is able to provide a current yield of 5.93% using this technique, assuming no December surprise occurs this year. The fund has just over $1 billion in assets managed. Its recent performance has been somewhat weak in terms of capital depreciation.

Year to date, the fund’s value has been basically flat, losing 0.56%. Going back to September, SDIV has been down from its previously higher level, and it has been largely range-bound since then. This fund’s expense ratio is 0.58%.

sdiv_061915

Though its holdings are theoretically equally weighted, they are not always precisely balanced in practice. Its top 10 current holdings total 12.50% of its assets. The largest holdings are Evergrande Real Estate Group, 1.58%; First Bank of Nigeria, 1.41%; Surge Energy Inc, 1.32%; Veresen Incorporated, 1.21%; and Intermediate Capital Group, 1.21%.

In terms of sectors, the fund is most strongly allocated to real estate, 35.07%; financial services, 21.05%; and utilities, 10.25%. Its portfolio of countries includes the United States, Australia, Singapore, France, Finland and many others.

Exclusive  Giving Thanks for Strong Global Markets with This Vanguard ETF

If you are looking to use an ETF to supercharge your income returns, Global X SuperDividend ETF (SDIV) might be exactly what you’re seeking.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed it, I encourage you to read my e-letter column from last week on Eagle Daily Investor about a multi-asset fund. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.

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The most recent data from May compiled by State Street Global Advisors, the company behind the Spiders, or SPDR ETFs, shows a distinct migration into international ETFs -- more specifically, into currency-hedged ETFs.

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