Author Topic: Thoughts on "Superdividend" Fund? (SDIV)  (Read 4610 times)

DryIceZ33

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Thoughts on "Superdividend" Fund? (SDIV)
« on: February 20, 2013, 05:29:02 PM »
I'm somewhat intrigued by this fund, and considering I haven't seen it discussed yet here, I'm curious whether it fits in well to add some yield to an income portfolio or even as a possible "dogs of the dow" type strategy.
http://www.globalxfunds.com/superdividendetf/home.php

As a quick snapshot, appears to be a Global fund that is diversified geographically, as well as across a variety of sectors REIT's, Utilities,  Telecom, Industrials, Consumer Discretionary.. typical income payers.

The criteria for inclusion in the fund is to be an equal weighting of the top 100 yielding securities in the world with a proprietary filter that removes companies likely to cut the dividend.... which I'm assuming looks at payout ratios, lower guidance, forecasted dividend cuts, etc.  The fee's aren't as low as vanguard, but not ridiculous either at around 0.6%.

In the quest for ER, my current taxable asset allocation is 100% stocks with a strategy of 50% dividend-income / 50% value-investing strategy (via Joel Greenblatt's Magic Formula Investing).  Income strategy to basically teach myself how to invest well for income while I'm in the accumulation phase, and value, because it's a viable long-term strategy with market-beating results.
Income Allocation (50%):
15% VIG (vanguard dividend appreciation etf)
15% Individual Stock picks with dividends
10% VPU (vanguard utilities index fund)
10% VNQ (vanguard reit index)

I've had a few individual picks on the value side do quite well, and it's time to re-balance some of the gains to the income side of my portfolio. Do you think SDIV is worth a look?  Anyone here own it?

KingCoin

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Re: Thoughts on "Superdividend" Fund? (SDIV)
« Reply #1 on: February 20, 2013, 09:36:57 PM »
Nothing jumps out at me as egregiously "off". Though, it's underperformed the S&P by a double digit margin (even taking into account dividends) since inception (6/11).

MooreBonds

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Re: Thoughts on "Superdividend" Fund? (SDIV)
« Reply #2 on: February 21, 2013, 09:36:10 PM »
Nothing jumps out at me as egregiously "off". Though, it's underperformed the S&P by a double digit margin (even taking into account dividends) since inception (6/11).

Comparing SDIV to the S&P is not a valid comparison, since SDIV is strictly an international dividend fund. The two are not alike. A blend of various international indexes would be a more accurate assessment.

I own SDIV, along with some other foreign ETFs and a few mutual funds (some dividend paying, some region/country specific). I also try to put a good chunk of my portfolio into foreign holdings as well as dividend payers.

Some other dividend-focused foreign ETFs are IDV, PID, DWX, DFE, DLS, AUSE, DVYE, DEM, and EDIV. Two that may not be available to DRIP due to low volume are DWX and DVYE.

KingCoin

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Re: Thoughts on "Superdividend" Fund? (SDIV)
« Reply #3 on: February 21, 2013, 10:08:45 PM »
Nothing jumps out at me as egregiously "off". Though, it's underperformed the S&P by a double digit margin (even taking into account dividends) since inception (6/11).

Comparing SDIV to the S&P is not a valid comparison, since SDIV is strictly an international dividend fund. The two are not alike. A blend of various international indexes would be a more accurate assessment.

This is of course true. There's no reason that high dividend, prominently international stocks should track the S&P.

It's somewhat worrying though that this fund substantially underperformed in a bull market. It's 45% real estate and finance related companies. How are those going to look in a bear market? Especially considering that the European real estate and financial services industries are of shakier ground than in the US.  Maybe they'll be somewhat buoyed by the more stable utility and communications companies. I haven't drilled into the individual holdings, so I'm just offering up some random thoughts potentially worthy of investigation if you haven't already.

stashstache123

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Re: Thoughts on "Superdividend" Fund? (SDIV)
« Reply #4 on: February 22, 2013, 07:32:09 PM »
The world is starving for yield, pushing companies that pay dividends well past their "intrinsic" values simply because they pay out most of their cash flow.  I would stay away.  Stick with the value funds.