Global X SuperDividend ETF (SDIV) ETF Review

Consider this article my warning treatise to would-be dividend ETF investors: chasing yield is a short-sighted and foolish strategy.

Your approach should always focus on dividend growth and dividend sustainability—two critical components of total return. I want every dividend paid to grow over time and remain reliable, even when the markets take a nosedive.

If you don’t believe me, this week’s review of the Global X SuperDividend ETF (SDIV) will show you why prioritizing yield over fundamentals often leads to disappointment.

SDIV: What I like

This section will be brief because, despite my best efforts, I only found two redeeming qualities about SDIV—and even those are more psychological than objective.

First is the obvious: the yield. According to Global X, the ETF’s benchmark, the Solactive Global SuperDividend Index, “invests in 100 of the highest dividend-yielding equity securities in the world.”

The result? A staggering 11% distribution yield—something typically seen with covered call ETFs selling at-the-money calls on 100% of their portfolio.

The second is the monthly distribution. While it’s irrelevant to total returns, I’ll admit it’s a nice psychological boost to get a notification from your brokerage app saying you’ve received money.

However, the ETF’s price typically drops by the amount paid on the ex-distribution date, all else being equal. So no, a distribution from an ETF isn’t “free money” despite what YouTubers might tell you.

SDIV: What I dislike

When I took a closer look at the Solactive Global SuperDividend Index, I was thoroughly dismayed by what I found.

Here’s the selection process: The index pulls stocks from around the world that are available to foreign investors, excluding those listed in India, China, and Argentina.

Eligible companies must have a dividend yield greater than 6% but less than 20% on selection day if they’re not already in the index, or greater than 3% if they’re currently components. There’s also a $500 million minimum market cap requirement.

As for quality control? The methodology includes a vague “qualitative check,” which basically means dividends should be at least stable. Specifically, as of selection day, there should be no official announcements that the dividend will be canceled or significantly reduced in the future.

That’s it. From this pool, the 100 highest-yielding stocks are selected. The only ongoing adjustment comes during the quarterly “dividend cut review day,” where stocks with announced dividend cuts or a negative outlook on dividend policy are screened out.

The issue? There’s no meaningful quantitative screen for quality. Ideally, you want filters for positive earnings forecasts, free cash flow yield, strong return on equity (ROE) and assets (ROA), and consecutive years of dividend growth.

That’s standard for the better dividend ETFs—and some go even further by excluding the top 10–25% highest-yielding stocks to avoid yield traps, which are typically companies with dreadful fundamentals.

SDIV’s index methodology is, frankly, yield-chasing in its purest form—and it’s been disastrous for investors. From June 9, 2011, to January 31, 2025, SDIV delivered an annualized return of -0.89%.

That’s right: you would have lost money over more than a decade, even if you reinvested that massive distribution yield perfectly. Adjusted for inflation, your losses would’ve been even worse.

For comparison, the SPDR 1–3 Month T-Bill ETF (BIL), a risk-free asset, returned an annualized 1.19% during the same period. A low-cost, globally diversified equity ETF like the Vanguard Total World Stock ETF (VT) returned an annualized 9.29% at just a 0.07% expense ratio.

Meanwhile, SDIV charges a hefty 0.58% expense ratio for this underperformance. It's hard to justify investing in an ETF that not only lags equities but can’t even beat cash parked in Treasury bills.

SDIV: My verdict

SDIV gets a 1/10 from me. The 11% yield and monthly distributions keep it from being a complete 0, but let’s be real—losing to T-bills during a decade-long bull market doesn’t exactly scream “good investment.”

Global X ETFs has plenty of great ETFs—this is not one of them. The key lesson here is simple: don’t chase yield and don’t fall for fancy names. Always benchmark against competitor ETFs and, if possible, take a hard look at the index methodology. It’ll save you from wasting time and money on ETFs like SDIV.