Is SPDR S&P Global Dividend ETF (WDIV) a Strong ETF Right Now?
Designed to provide broad exposure to the World ETFs category of the market, the SPDR S&P Global Dividend ETF (WDIV) is a smart beta exchange traded fund launched on 05/29/2013.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors. WDIV has been able to amass assets over $223.18 million, making it one of the average sized ETFs in the World ETFs. WDIV, before fees and expenses, seeks to match the performance of the S&P Global Dividend Aristocrats Index.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 5%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Adecco Group Ag Reg (ADEN) accounts for about 2% of the fund's total assets, followed by A2a Spa (A2A) and Sumitomo Forestry Co Ltd.
The top 10 holdings account for about 15.99% of total assets under management.
Performance and Risk
So far this year, WDIV has gained about 0.01%, and is down about -0.24% in the last one year (as of 09/12/2023). During this past 52-week period, the fund has traded between $51.92 and $62.68.
The ETF has a beta of 0.81 and standard deviation of 13.95% for the trailing three-year period, making it a low risk choice in the space. With about 119 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 $17.85 billion in assets, Vanguard Total World Stock ETF has $28.96 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
iShares MSCI ACWI ETF (ACWI): ETF Research Reports
Vanguard Total World Stock ETF (VT): ETF Research Reports
