The combination of a middling Process Pillar rating and a Low People Pillar rating limit  Global X S&P 500® Quality Dividend ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The team managing the passive strategy earns a Low People Pillar. The strategy earns an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and yield exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. 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

Valero Energy

Emerson Electric

QUALCOMM

Hartford Financial Services Group

Tapestry

Merck

Ralph Lauren

eBay

Exxon Mobil

NetApp

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 S&P 500® Quality Dividend ETF earns an Average Process Pillar rating. 

The most meaningful contributor to the rating is that this fund tracks 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. 

 This strategy leans toward smaller, more value-oriented companies than its average peer in the Large Value Morningstar Category. Looking at additional factor exposure, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy's portfolio also has had exposure to more stocks with high dividend or buyback yields over peers in these years. 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. Compared with category peers, the strategy also had more exposure to the Yield factor in the most recent month. During the last few years, this strategy has also tilted in favor of high-quality stocks, those that have demonstrated low financial leverage and solid return on equity. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets. In this month, the strategy also had more exposure to the Quality factor over 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 consumer defensive and industrials relative to the category average by 13.8 and 5.1 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and technology, underweight the average by 10.2 and 4.8 percentage points of assets, respectively. The strategy owns 65 securities and is diversified among those holdings. In its most recent portfolio, 18.4% of the strategy's assets were concentrated in the top 10 fund holdings, compared to the category average's 27.4%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 79% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Average

Process

Global X’s team earns a Low People Pillar rating. The most significant 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 holds the team back. The experience of the management team, which averages four years at this fund, limits the team 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.

Parent

Global X S&P 500 Quality Dividend ETF

QDIV tracks an index of equal-weighted US large-cap stocks selected from the S&P 500 Index based on quality and dividend metrics.

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Both QDIV and SCHD invest in large-cap U.S. stocks that pay dividends, but they have different selection criteria and weighting methods, with SCHD having a lower expense ratio and higher dividend yield. QDIV has a lower price-to-earnings ratio and pays dividends monthly, while SCHD pays quarterly; SCHD has realized a higher total return since August 2018. Analysis of the underlying indices of both ETFs shows they outperform the S&P 500, especially during down markets, with QDIV potentially offering higher returns over a 24-year period.

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The Schwab U.S. Dividend Equity ETF remains a superior quality dividend ETF compared to the Global X S&P 500 Quality Dividend ETF, mainly due to SCHD's 5-year dividend growth track record requirement. SCHD also has a lower expense ratio and a higher dividend yield than QDIV, making it a more attractive investment option. Despite some advantages of QDIV, such as a lower P/E ratio and monthly dividend payout schedule, SCHD continues to be the preferred choice for dividend growth investors.

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QDIV invests in high-quality, high-yield stocks assessed on past growth, payments, and other fundamental metrics. Dividend-focused securities rose in popularity last year as inflation stifled many companies' growth prospects.

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Once upon a time, dividends played a starring role in equity markets—until 14 years of easy money whetted investors' appetite for risk and created a massive tailwind for unprofitable, long-duration growth stocks. Valuations appear to be attractive: Stocks yielding north of 2.5% are trading near their largest discount to the equity market in recent memory.

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QDIV favors high-yield S&P 500 stocks without compromising on quality. As of January 13, the QDIV portfolio included 77 equities, with a pronounced tilt towards the consumer staples (17.4%) and industrials (15.3%) sectors.

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With a lot of optimism abound for the stock market in 2023, higher dividends could also be a byproduct of upside in the new year. That could especially be the case for the energy sector, which saw strength amid rising fuel prices in 2022.

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With inflation running hot, getting additional income could mean taking on more risk for the fixed income investor, but there are alternatives that don't come at a high price. Rising consumer prices are certainly not relegated to the U.S. Countries around the globe are grappling with the same issue, giving fixed income investors headaches around [.

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The thought of investing in thematic exchange traded funds (ETFs) doesn't have to be associated with higher prices if investors know where to look, such as at these three Global X funds. Getting internationally diversified exposure isn't tagged with exorbitant expense ratios, especially with the Global X DAX Germany ETF (DAX).

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Getting quality dividends that can offer a higher yield than the current benchmark 10-year Treasury note need not be an expensive affair with the Global X S&P 500 Quality Dividend ETF (QDIV), which comes in at a low 0.20% expense ratio. Investors might be able to simply pick individual dividend-paying stocks, but it's not that [.

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Recent upticks in Treasury yields might have fixed income investors more hopeful for yield, but those still seeking more can consider the Global X S&P 500 Quality Dividend ETF (QDIV) and Global X SuperDividend U.S. ETF (DIV). QDIV offers ETF investors an annual dividend rate of about 3% with a low 0.20% expense ratio.

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Getting quality exposure to monthly dividends doesn't have to come with a high expense ratio. The Global X S&P 500 Quality Dividend ETF (QDIV) offers ETF investors an annual dividend rate of about 3% with a low 0.20% expense ratio.

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