SDIV ETF

Generating passive income can bring financial freedom. If you can collect enough income from passive sources to cover your living expenses, you won't have to worry about working anymore to pay the bills.

Global X SuperDividend ETF offers a tempting 10% yield but has a poor long-term performance, making it a hard sell for passive income investors. Despite recent short-term gains, the ETF has consistently failed to grow its net asset value, returning -0.20% per annum since inception. The ETF's portfolio is diversified globally but concentrated in high-risk sectors like Energy, Financial Services, and Materials, adding to its volatility.

SDIV has underperformed the S&P 500 but performed fine among ex-US equity areas, with the Real Estate sector showing surprising strength as of late. The ETF offers high foreign allocation to Real Estate, and its valuation is downright cheap today after returning about 15% since June 2023. SDIV accesses 100 high dividend-paying equities globally, providing diversification and potential for increased portfolio yield, but the portfolio's sector composition differs significantly from that of the S&P 500.

SDIV is known for its high dividend yield of 10.8%, making it one of the top-performing equity ETFs. However, the fund has experienced decreases in distributions and share prices in the past. There are other income ETFs that offer similar yields but with better dividend growth and historical returns. Some alternatives will be discussed below.

The Global X SuperDividend™ ETF focuses on investing in high dividend yielding stocks around the world, aiming to replicate the performance of the Solactive Global SuperDividend Index. SDIV distributes dividends on a monthly basis.

The Global X SuperDividend ETF warrants a strong sell due to declining share price, poor fundamental qualities, and geopolitical risks. Alternative funds such as SPHD, DIVO, and JEPI offer substantial dividend yields and capital appreciation. SDIV has a high expense ratio, negative dividend yield growth rate, and a 5-year total price return of -61.45%.

Interest rates in the U.S. may have already reached their peak and the expectation for a rate cut in 2024 has increased, giving the Global X SuperDividend ETF a temporary reprieve. Its double-digit dividend yields and diversity of country and sector exposure are certainly good attributes in uncertain times. It is important to consider both income generation and capital gains when evaluating a dividend ETF like SDIV.

On this episode of the “ETF of the Week” podcast, Tom Lydon discussed the Global X SuperDividend ETF (SDIV) with Chuck Jaffe of “Money Life.” The pair talked about several topics regarding the fund to give investors a deeper understanding of the ETF overall.

VettaFi's vice chairman Tom Lydon discussed the Global X SuperDividend® ETF (SDIV) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life.” For more news, information, and analysis, visit VettaFi | ETF Trends.