Global X Funds, the New York-based ETF provider known for niche strategies, filed regulatory paperwork to market a U.S.-focused high-dividend ETF that would also pick securities based on volatility levels—a strategy that’s akin to a fund Invesco PowerShares rolled out last month.
The Global X Super Dividend U.S. ETF, which will list on the New York Stock Exchange’s electronic trading platform Arca under the ticker 'DIV', will track the INDXX SuperDividend U.S. Low Volatility Index and invest in stocks, master limited partnerships and REITs that have paid dividends consistently in the previous two years.
The fund will also screen for volatility, picking securities that show lower volatility relative to the market, the filing said.
As noted, DIV will go head-to-head with another newcomer: the two-week-old PowerShares S&P 500 High Dividend Portfolio (NYSEArca: SPHD), a pioneering fund that was the first to blend two of the hottest themes in ETF investing these days: high dividends and low volatility.
Indeed, investors have embraced all sorts of strategies that promise income in an environment of compressed yields, as well as those that keep volatility in check. Funds like the $2.48 billion PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV) and the $2.22 billion iShares High Dividend Equity Index Fund (NYSEArca: HDV) speak to that demand.
But what SPHD brought to the market—and what DIV also hopes to achieve—is the blending of these two themes into a single wrapper as a way to provide investors with one portfolio that not only generates income but also limits exposure to companies whose shares might be subject to relatively sharp movements in price.
DIV expands on Global X’s success with its global-in-scope Global X SuperDividend ETF (NYSEArca: SDIV), which has gathered $161 million since it came to market in the summer of 2011. SDIV costs 0.58 percent.
No fees for the Global X Super Dividend U.S. ETF were disclosed in the filing.
SPHD, which has gathered $10 million so far, has an annual expense ratio of 0.30 percent.
This week, the NYSE expects to hear from the SEC. What will it mean for ETF investors?
Our annual fixed-income conference is coming up in a little more than a week and I can’t wait.
When it comes to reinvesting dividends, mutual funds have ETFs beat.
With VIX spiking, it’s tempting to pile in or bet against it. Both are a bad idea.