Weakness in Global X SuperDividend™ US ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The team managing the passive strategy earns a Low People Pillar. The strategy gets a Below Average Process Pillar rating.  High yield exposure is attributed to holding high dividend-paying or buyback stocks, and is suitable for income seekers outside of fixed-income. And a low liquidity exposure is rooted in stocks with lower trading volumes, limiting managers' flexibility. The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

Virtu Financial

Berry Petroleum Corp.

Avangrid

National Health Investors

Coterra Energy

Chesapeake Energy

Kinder Morgan

Chord Energy Corp

Telephone and Data Systems

Dominion Energy

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Global X SuperDividend™ US ETF earns a Below Average Process Pillar rating. 

The process is strengthened by tracking an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. However, the rating is limited by the fund's weak long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. 

 This strategy leans toward smaller, more value-oriented companies compared with its average peer in the Mid-Cap Value Morningstar Category. Analyzing additional factors, this strategy has continually had more high-yield exposure than the Morningstar Category average during recent years, with the portfolio holding more stocks with high dividend or buyback yields. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts stock performance. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. This strategy has also exhibited an overweight liquidity risk tilt, evidenced by holding companies with relatively lower trading volumes than peers in these years. Less-liquid stocks might offer strong returns to compensate for their risks, but they can be harder and more expensive to trade in bear markets. Similarly, in recent months, the strategy also had less exposure to the Liquidity factor than peers. This strategy also has tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over these years. Such positions do not tend to provide much ballast for a portfolio. In recent months, the strategy also had less Quality factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in energy and real estate relative to the category average by 16.8 and 10.6 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and industrials, underweight the average by 11.5 and 10.9 percentage points of assets, respectively. The portfolio is positioned across 65 holdings and is relatively top-heavy. Of the strategy's assets, 22.3% are concentrated within the top 10 holdings, as opposed to the typical peer's 17.3%. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 63% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Below Average

Process

Global X’s team receives a Low People Pillar rating. The main detractor from the rating is the parent firm's five-year success ratio of 30%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup. The parent firm's five-year retention rate of 67% also weakens the team. The experience of the management team, which averages four years at this fund, detracts from the rating as well.

People

Mirae Asset Global Investments is a Korean asset manager and a key player in the Asian financial market. It is a wholly owned subsidiary of Mirae Asset Financial Group, founded by Hyeon Joo Park. Park’s leadership and entrepreneurial spirit have been the driving force behind the global rise of Mirae, and he holds a majority stake in the business. 
Mirae Asset has grown significantly over the years (USD 198 billion as of December 2022) across a diversified platform, of which about 60% of assets are managed in South Korea. We believe that Mirae’s core mutual fund business in the Asia-Pac region is relatively strong. It has a collaborative structure, a strong and large investment team, low manager turnover, competitive fees, and a disciplined approach to product-development pointing toward better stewardship practices relative to peers in these markets. However, this is in stark contrast to its exchange-traded fund business, which accounts for 41% of the total assets. 
The firm’s ETF lineup focuses largely on high-risk thematic strategies that seem gimmicky, emphasizing short-term asset-gathering. The firm appears to leverage trending topics such as robotics and artificial intelligence, virtual reality and gaming, and cloud computing. There’s a notable concern regarding the potential liquidation of these funds since they seem to be designed around investment fads. Furthermore, these products are often expensive, especially compared with broadly diversified index funds and ETFs. Unsurprisingly, Mirae's reflexive product-development strategy has led to an increase in fund closures.
Our experience engaging with the MAGI team to gather critical information for the parent assessment has not been as positive. It hasn’t been as transparent in its disclosures, and unlike its peers, its responsiveness has been inadequate. We prefer firms with a more transparent corporate culture. Overall, these actions hold us back, and the firm retains its Parent Pillar rating of Average.

Average

Parent

Global X SuperDividend US ETF

DIV tracks an equally weighted index of 50 high-dividend, low-volatility securities.

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In the current market environment, you can't have too much yield and a pair of dividend exchange-traded funds (ETFs) from Global X have them in spades. Even with the U.S. Federal Reserve raising the federal funds rate by 25 basis points, the rate environment is still relatively low by historical standards.

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With rate hikes forthcoming, the search for more yield can start with a pair of dividend-focused ETF options from Global X: the Global X SuperDividend U.S. ETF (DIV) and the Global X SuperDividend ETF (SDIV). Even with yields rising, you'll be hard-pressed to find Treasury notes giving fixed income investors beyond 3%.

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News for Global X SuperDividend US ETF ETF (DIV)