ETF Education Report: Global X SuperDividend U.S. ETF (DIV)

What this ETF is trying to do

The Global X SuperDividend U.S. ETF (ticker: DIV) is an exchange-traded fund designed to focus on high-dividend-paying stocks in the United States. It holds a variety of companies across different industries to provide regular cash payments to investors.

What the numbers show

When looking at an ETF, it is important to understand two different types of returns: price return and total return.

• Price Return only measures how much the share price has changed.

• Total Return includes both the change in share price *and* the money paid out through distributions.

For DIV, the numbers show:

• Year-to-Date (YTD): The price return is approximately 9.87%, while the total return is approximately 14.89%.

• One-Year: The price return was approximately 8.25%, while the total return was approximately 15.95%.

• Three-Year: The price return was approximately 16.46%, while the total return was approximately 42.21%.

Based on an estimated price from roughly one year ago of $17.58, the current price is $19.03.

Top Holdings

The ETF holds 51 total companies. Because this list is partial, we are only looking at the largest ones:

• Tsakos Energy Navigation Ltd (2.92%)

• CBL & Associates Properties Inc New (2.91%)

• Millicom International Cellular SA (2.79%)

• Plains All American Pipeline LP (2.47%)

• Suncore Energy Inc (2.41%)

• SFL Corp Ltd (2.34%)

• Alexander's Inc (2.32%)

• Flex LNG Ltd (2.32%)

• CVR Partners LP (2.31%)

• Global Ship Lease Inc Class A (2.26%)

*Note: Holdings can change over time.*

Income and distribution explanation

This ETF is known for providing cash distributions. The distribution yield is approximately 6.74%. This means the amount of cash paid out is high relative to the ETF's price. These payments usually happen monthly, and there were 13 distributions recorded over the last 12 months.

It is important to remember that a high distribution yield does not guarantee the same level of total return. Investors often look for income, but they must also watch how the share price moves.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in an ETF decreases over time. Some high-yield ETFs suffer from this, which can cause the share price to drop even while they pay out cash.

For DIV, the erosion-risk score is 100, and the label states "No price erosion detected." The erosion severity is rated as "good," and there is no severe erosion-risk flag present.

Pros

• Provides a high distribution yield (approximately 6.74%).

• The total return has been significantly higher than the price return over the last three years.

• No price erosion was detected based on current risk measurements.

Cons

• The fund focuses on high dividends, which may involve different risks than broader market funds.

• Investors should always monitor if high distributions are being maintained by the fund's actual growth.

Beginner takeaway

When looking at DIV, notice the gap between the price return and the total return. This gap exists because the total return includes the cash distributions paid to you. While high yields can be attractive for income, always check the erosion-risk score to see if the share price is staying stable.