Over the past 90 days, the top two sectors are Utilities and Energy and theother sectors are not even close.
Combine the dividend and value reputations of the energy and utilities sectors, and it would be logical to assume that plenty of dividend funds are benefiting from the rise of those sectors. The Global X SuperDividend U.S. exchange traded fund (DIV) certainly is, having joined an array of energy and utilities ETFs in hitting consecutive all-time highs in recent days.
DIV allocates almost 44% of its combined weight to the utilities and energy sectors. None of the four largest U.S. dividend ETFs exceed DIV’s combined utilities and energy sector allocations.
DIV’s utilities and energy mix is proving rewarding. Over the past 90 days, the fund, which sports a trailing 12-month yield of 5.7%, is higher by more than 4%.
To be fair, DIV has an advantage over some of its rivals in that all of its energy holdings with the exception of Chevron are master limited partnerships, a trait that bolsters DIV’s yield while making the ETF a beneficiary of declining Treasury yields. Speaking of falling Treasury yields…
As have other utilities-heavy dividend ETFs, DIV has benefited from declining Treasury yields. Ten-year Treasury yields are lower by nearly 5% over the past three months.
After Federal Reserve Chair Janet Yellen hinted in late March that interest rates could rise sooner than previously expected, some investors are understandably skittish about exactly when rates will rise and the subsequent impact on their portfolios. However, that has not adversely affected DIV and that is arguably a pleasant surprise when considering the ETF allocates over half of its combined weight to rate-sensitive utilities, telecoms and real estate investment trusts.
DIV pays a monthly dividend.
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Global X Super Dividend (DIV) is a component of the D2 Capital Management Multi-Asset Income Portfolio. Current dividend yield of DIV is 5.7% and the dividend yield of the total portfolio is 5.43% (as of 22 April 2014).Disclosure: I own the D2 Capital Management Multi-Asset Income Portfolio
The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.
The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville. The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.
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