News

Making its debut on 05/29/2013, smart beta exchange traded fund SPDR S&P Global Dividend ETF (WDIV) provides investors broad exposure to the World ETFs category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

Managed by State Street Global Advisors, WDIV has amassed assets over $204.60 million, making it one of the average sized ETFs in the World ETFs. WDIV seeks to match the performance of the S&P Global Dividend Aristocrats Index before fees and expenses.

The S&P Global Dividend Aristocrats Index measures the performance of high dividend-yield companies included in the S&P Global BMI that have followed a managed-dividends policy of increasing or stable dividends for at least ten consecutive years.

Cost & Other Expenses

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

Operating expenses on an annual basis are 0.40% for WDIV, making it one of the cheaper products in the space.

The fund has a 12-month trailing dividend yield of 4.42%.

Sector Exposure and Top Holdings

ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

Looking at individual holdings, Solvay Sa (SOLB) accounts for about 2.72% of total assets, followed by Altria Group Inc (MO) and Highwoods Properties Inc (HIW).

WDIV's top 10 holdings account for about 19.87% of its total assets under management.

Performance and Risk

So far this year, WDIV has added about 12.58%, and is up roughly 18.98% in the last one year (as of 12/06/2024). During this past 52-week period, the fund has traded between $56.94 and $67.03.

WDIV has a beta of 0.82 and standard deviation of 13.47% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 129 holdings, it effectively diversifies company-specific risk.

Alternatives

SPDR S&P Global Dividend ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

IShares MSCI ACWI ETF (ACWI) tracks MSCI All Country World Index and the Vanguard Total World Stock ETF (VT) tracks FTSE Global All Cap Index. IShares MSCI ACWI ETF has $19.96 billion in assets, Vanguard Total World Stock ETF has $42.90 billion. ACWI has an expense ratio of 0.32% and VT charges 0.07%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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SPDR S&P Global Dividend ETF (WDIV): ETF Research Reports

Highwoods Properties, Inc. (HIW) : Free Stock Analysis Report

Altria Group, Inc. (MO) : Free Stock Analysis Report

iShares MSCI ACWI ETF (ACWI): ETF Research Reports

Vanguard Total World Stock ETF (VT): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.