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Global X SuperDividend REIT ETF: A Solution In Search Of A Problem?

Published Thu, 21 Mar 2019 16:01:01 -0400 on Seeking Alpha

During the years I have warned investors about blindly investing in a "sexy" ETF idea without first understanding the underlying index and how the fund works.
One thing that investors need to understand is that ETFs were primarily trading vehicles. They are not, or at least were not designed to be long-term investments hoping to generate alpha. To a sponsor, the primary goal is to gather assets while following the index. It's not to generate alpha, to provide above market returns or to preserve capital.
Another concept that goes hand in hand with this is chasing a distribution. While closed-end fund investors will certainly understand that a high distribution comes with a price, ETF investors are less receptive of this and will in many times explain higher distributions by lower ETF fees or the fund's ability to access a hard to reach area of the market where returns are higher.
Some sponsors will certainly push that notion with attractive ETF names such as "high income" and "high yield."
When "high income" is not enough, there is always "super" such as with the Global X SuperDividend line of funds.
In the past we looked at the very popular Global X SuperDividend ETF (SDIV) and found that despite the fund distributing a higher rate of income, it's overall performance was meaningfully lacking. This stemmed from the underlying index which was designed to track high distributions, and not quality of those distributions. If you have not yet, please take a look at... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
APOLLO COMMERCIAL REAL ESTATE FINANCE 18.57   12.1 1.54 1.84 10.02
ARBOR REALTY TRUST 12.21   8.7 1.40 1.16 9.70
GLOBAL X SUPERDIVIDEND ETF 15.85   0.0 0.00 0.00 9.46
PENNYMAC MORTGAGE INV TRUST 21.59   9.2 2.35 1.88 8.57
STARWOOD PROPERTY TRUST 23.47   17.8 1.32 1.92 8.17
NUVEEN REAL ESTATE INCOME FUND 10.51   0.0 0.00 0.00 7.29
BLACKSTONE MORTGAGE TRUST 35.05   14.1 2.49 2.48 7.15
COHEN & STEERS TOTAL RETURN REALTY FUND 14.40   0.0 0.00 0.00 6.68
COHEN & STEERS REIT 23.02   0.0 0.00 0.00 6.56
VEREIT 9.56   39.8 0.24 0.55 5.78


Older articles featuring Apollo Commercial Real Estate Finance (ARI):
2019 Half Year 10% Yield Update; Truth Behind High-Yield Is Revealed
Global X SuperDividend REIT ETF: 8% Yield Comes With Higher Risk
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