SDIV: 10% Yielding ETF, Heavy On Mortgage REITs

seekingalpha05-15

Global X SuperDividend™ ETF invests in high dividend paying equities globally.The SDIV ETF aims to track the Solactive Global SuperDividend Index.SDIV is a monthly dividend payer. dem10/E+ via Getty...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2435541194?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/184104439/image_184104439.jpg","is_english":true,"pubTime":"2024-05-15 01:53","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2435541194","market":"nz","top_or_hot":-1,"title":"SDIV: 10% Yielding ETF, Heavy On Mortgage REITs","media":"seekingalpha","content":"<div>\n<p>Global X SuperDividend™ ETF invests in high dividend paying equities globally.The SDIV ETF aims to track the Solactive Global SuperDividend Index.SDIV is a monthly dividend payer.   dem10/E+ via Getty...</p>\n\n<a href=\"https://seekingalpha.com/article/4693146-sdiv-10-percent-yielding-etf-heavy-on-mortgage-reits\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>SDIV: 10% Yielding ETF, Heavy On Mortgage REITs</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSDIV: 10% Yielding ETF, Heavy On Mortgage REITs\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-15 01:53 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4693146-sdiv-10-percent-yielding-etf-heavy-on-mortgage-reits><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Global X SuperDividend™ ETF invests in high dividend paying equities globally.The SDIV ETF aims to track the Solactive Global SuperDividend Index.SDIV is a monthly dividend payer.   dem10/E+ via Getty...</p>\n\n<a href=\"https://seekingalpha.com/article/4693146-sdiv-10-percent-yielding-etf-heavy-on-mortgage-reits\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IE00B66KJ199.SGD","symbol_name":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY  \" A\" (SGD) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4693146-sdiv-10-percent-yielding-etf-heavy-on-mortgage-reits","article_id":"2435541194","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/184104439/image_184104439.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2435541194","pubTimestamp":1715709193,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Global X SuperDividend ETF invests in high dividend paying equities globally.The SDIV ETF aims to track the Solactive Global SuperDividend Index.SDIV is a monthly dividend payer.   dem10/E+ via Getty ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE00B66KJ199.SGD":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY  \" A\" (SGD) ACC","BK4127":"投资银行业与经纪业","CFA.SI":"NikkoAM-STC Asia REIT","IE00B7SZL793.SGD":"Legg Mason Royce - US Small Cap Opportunity A Acc SGD-H","BK4585":"ETF&股票定投概念","BK4588":"碎股","RC":"Ready Capital Corp","DX":"德尼克斯投资","IE00B19Z4B17.USD":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY \"A\" (USD) ACC","BK4110":"抵押房地产投资信托","FDN":"First Trust Dow Jones Internet I","NLY":"Annaly Capital Management","AGNC":"美国资本代理公司","RILY":"B. Riley Financial, Inc.","IE0031619046.USD":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY \"A\" (USD) INC","SDIV":"Global X SuperDividend ETF","CFA":"VictoryShares US 500 Volatility Wtd ETF"},"translate_title":"SDIV：收益率为10%的ETF，主要投资于抵押贷款房地产投资信托基金","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AGNC":1,"CFA":1,"CFA.SI":1,"DX":1,"FDN":1,"SDIV":1,"NLY":1,"RC":1,"RILY":1,"US6M.BOND":0.9,"US5Y.BOND":0.9,"US3Y.BOND":0.9,"US30Y.BOND":0.9,"US2Y.BOND":0.9,"US12M.BOND":0.9,"US10Y.BOND":0.9,"US7Y.BOND":0.9,"US912797FH58.BOND":0.6,"US912797FS14.BOND":0.6,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6},"content_text":"Global X SuperDividend™ ETF invests in high dividend paying equities globally.The SDIV ETF aims to track the Solactive Global SuperDividend Index.SDIV is a monthly dividend payer.   dem10/E+ via Getty Images Global X SuperDividend™ ETF (NYSEARCA:SDIV) invests in \"100 of the highest dividend paying equities\" globally. This passive exchange-traded fund's goal is to track the investment results of the Solactive Global SuperDividend Index. It invests at least 80% of its total assets in the index components or securities that embody the characteristics of the index components. SDIV is a monthly dividend payer, and based on the last payout of 19 cents and the recent market price of $22.43, it currently yields around 10.16%. Seeking Alpha The yield of this fund was on an upward trajectory during our previous coverages on this platform. Seeking Alpha The theme was always the same, however. The juicy yield was just the right amount of blinkers for its investors to ignore the abysmal total returns. The following visual is telling and speaks volumes about the hole it has left in its unit holders' pockets since our first piece back in January 2021. Data by YCharts Since our last piece in October 2023, this fund has been the beneficiary of the bull market tide that is prevalent across the board. So yes, the unit holders that got in at that time, have been able to keep the hefty yield and enjoy a bit of capital appreciation, too. Data by YCharts It has also held its head above water from October 2020, but barely. It is time for another deep dive into this fund's prospects and whether we think the glory days of early 2021 are around the corner for it. Holdings According to the fund notes, this is how it selects companies for high yield.  Dividend Yield > 6% and < 20% on the Selection Day for companies which currently are not Index Components, Dividend Yield > 3% for companies which currently are Index Components. Market Cap of at least $500 MM USD on the respective Selection Day. Average Daily Volume in the last 3 months of at least $1,000,000 USD on the respective Selection Day. Dividend Forecast is at least stable, i.e. there is no official announcement as of the Selection Day that dividend payments will be cancelled or significantly reduced in the future. No Closed End Fund, Partnership (both Qualified Publicly Traded Partnership and non-qualified Partnership) or Trust. No BDCs (Business Development Companies)  Source: Fund Methodology It is funny that SDIV has decided that anything more than 20% yield is a red flag. In our experience, 90% of the stocks that yield over 12% tend to be problematic and produce very poor total returns. One area where you can get 10% yields with relatively good total returns are business development companies, or BDCs, but SDIV has thrown that category out. So right off the bat, this is likely to be a poor selection method, but let's see what the company is actually holding these days. SDIV is sticking to its knitting and going far and wide to pick up the highest yielding global securities. 8 out of 10 top holdings traded outside the U.S., and a lot of them were extremely low-priced securities. SDIV Website The overall weighting is heavily within financials and energy. SDIV Website Most global funds tend to have about half their holdings within the U.S., but SDIV only manages one-third here. SDIV Website The only one we turned out to have a lot of information on was B. Riley Financial Inc. (RILY). That company was under intense pressure from short seller allegations, and recent events went in its favor. It is unclear as to where SDIV went into this. Data by YCharts It is possible that on the next rebalancing event, RILY is eliminated as the dividend was cut. Once a quarter (ten business days before the last trading day in May, August and November), the index components are screened for dividend cuts or an overall negative outlook concerning the companies’ dividend policy. Companies may be excluded on these quarterly reviews and will be replaced with the top ranked company from the selection pool that is currently not an index member. Source: Fund Methodology. Going down further in the list of its holdings (i.e., outside the top 10), we were able to find some very familiar names, including, 1) Annaly Capital Management Inc. (NLY). 2) AGNC Investment Corp (AGNC). 3) Dynex Capital Inc. (DX). 4) Ready Capital (RC). The above are all mortgage REITs, or mREITs. As our readers know by now, mortgage REITs are probably the worst asset class to hold over long periods of time. Below are their returns until April 25, from NAREIT, over various timeframes.   NAREIT Over the last two decades, the total returns have been negative for this asset class. You will notice the price column is negative over all timeframes, save the 1-year period. That is what we generally get with these. A considerable dividend that is offset to a large extent by a falling price. Over time, the dividends are reduced, and these tend to underperform. At present, we see an above-average risk in mortgage REITs even relative to their poor history. NLY, AGNC, DX and RC are all stocks we have looked at, and they definitely carry high risk. And, of course, SDIV is not doing any fundamental analysis here. They are buying based on yield, which will work out exactly as it has for the fund since inception. Verdict We like generating high yields using quality stocks and longer dated options. What we really dislike, though, are capital losses. The \"I am collecting my income, damn the capital losses\" phrase is not one we care about. When we started comparing against SDIV, it proved to be a very interesting exercise of holding firm in our core beliefs. We knew that SRET was the opposite of everything we believed in, and we knew it was destined to do poorly relative to our own endeavors. But it did not start off that way. 44 months later, things are going more or less as expected. Conservative Income Portfolio The recent jump up from the time we wrote our last update on SRET is likely an anomaly. While the fund could move a bit higher, even from here, the stock-picking method is extremely dangerous. Once we hit a recession, there will likely be even more underperformance. Inflation remains stubborn, and we think SDIV will turn out to be a poor investment from here. This fund deserves an exit, and investors should move to one that emphasizes fundamental analysis that goes beyond the dividend yield.  Please note that this is not financial advice. It may seem like it, sound like it, but surprisingly, it is not. Investors are expected to do their own due diligence and consult a professional who knows their objectives and constraints.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2435541194"}