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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 Global Large-Cap Value Equity ETF category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
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 sponsored by State Street Global Advisors. It has amassed assets over $200.13 million, making it one of the larger ETFs in the Global Large-Cap Value Equity ETF. Before fees and expenses, this particular fund 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for WDIV are 0.40%, which makes it one of the least expensive products in the space.
WDIV's 12-month trailing dividend yield is 4.26%.
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.
Taking into account individual holdings, Apa Group (APA) accounts for about 1.76% of the fund's total assets, followed by Altria Group Inc (MO) and Bouygues Sa (EN).