Global X launched today an ETF that offers a smart-beta angle on the S&P 500 Index. The Global X S&P 500 Quality Dividend ETF (QDIV) tracks an index that picks securities from the S&P 500 and screens for exposure to dividends and the quality factor.
The new fund comes with an expense ratio of 0.35% and lists on the Cboe BXZ exchange. Cboe Global Markets is the parent company of ETF.com.
As noted, QDIV’s underlying index selects its components from the S&P 500, ranking them based on their quality scores and dividend yields. A stock must fall within the top 200 securities in the universe for both criteria.
According to Jay Jacobs, Global X’s head of research and strategy, the methodology results in a portfolio of roughly 80 stocks. These securities are equally weighted, according to the prospectus.
“By focusing on these top-tier quality names that are producing some dividend yield, it’s another option for investors who are looking for some income for their portfolio but want to get it from somewhere outside the fixed-income space,” Jacobs said, noting that some investors are still hesitant about fixed income in a rising rate environment.
Global X’s Dividend Funds
Global X already offers an array of six high-dividend-yield funds through its SuperDividend family. However, that’s not the only way to look at dividends, Jacobs says.
“We think about dividend investing as three different strategies,” he said—they are high-dividend-yield strategies, dividend-growth strategies and quality-dividend strategies.
The three approaches offer you exposure to different types of stocks. For instance, quality dividend provides access to sectors like consumer and technology, which really don’t show up among the utilities, telecoms and real estate securities typical of high dividend yield strategies, nor among the tech and healthcare stocks typically offered by dividend-growth strategies.
Jacobs says QDIV can be seen as a complement to Global X’s existing SuperDividend funds, such as the domestically focused Global X SuperDividend US ETF (DIV).
Contact Heather Bell at [email protected]