New Research From Global X Funds Examines The Case For High-Dividend Equity Investments Investment study shows high-dividend stocks often perform better with less volatility
NEW YORK, March 4, 2013 /PRNewswire/ -- Global X Funds, a New York sponsor of innovative exchange traded funds (ETFs) is pleased to announce the results of its new study examining the performance and relative volatility of high dividend-paying stocks over time. According to the new research, dividend-paying stocks outperformed non-dividend payers, while higher yielding companies generally provided higher risk-adjusted returns.
The firm's new research paper, "High Dividends: Myth vs. Reality," provides new research on volatility and addresses common misconceptions surrounding high dividend-paying stocks. It can be accessed via the firm's website here.
According to the study, when tested against a number of risk factors, dividend-paying stocks repeatedly outperformed non-dividend payers over a time period of ten years. The study also examines relative performance of very high dividend-paying stocks, in the 10%-17% range, and showed this group often outperformed relative to equities with lower dividends.
"Conventional wisdom holds that higher dividends mean lower performance, but our research shows the exact opposite," said Bruno del Ama, CEO of Global X Funds. "We wanted to tackle the issue of dividends head on, and demonstrate to investors that high-yielding global dividend stocks may be an important part of a portfolio."
The study found that, even in bear markets, dividend stocks proved to be less volatile than non-dividend payers. This lower risk factor, combined with the historical outperformance of high dividend-payers and limited investment options for these companies, guided Global X in the creation of its SuperDividend ETF (SDIV), which launched in June 2011.
The Fund currently has more than $350 million in assets. SDIV's fund basket consists of 100 equal-weighted companies that rank amongst the highest dividend-paying equity securities across global markets. IndexUniverse named SDIV as one of its Top 5 ETF picks for 2013.*
"Given this sustained low-interest rate environment we find ourselves in, investors need to find creative ways to obtain yield across new asset classes. Our SuperDividend ETF provides investors with access to a class of dividend payers that have been traditionally untapped," said Mr. del Ama.
ABOUT GLOBAL X FUNDS
Global X Funds is a New York-based provider of exchange-traded funds that facilitates access to investment opportunities across the global markets. With $1.7 billion in managed assets and over 100,000 investors from more than 100 countries as of February 25, 2013, Global X Funds currently offers exchange-traded funds that target Commodity Producers, International, Alternatives, Industry, Income, and Asset Allocation fund suites. For more information, please visit www.globalxfunds.com.
To receive a distribution, you must be a registered shareholder of the fund on the record date. Distributions are paid to shareholders on the payment date. There is no guarantee that capital gains distributions will not be made in the future. Your own trading will also generate tax consequences and transaction expenses. Past distributions are not indicative of future distributions. Please consult your tax professional or financial adviser for more information regarding your tax situation.
Investing involves risk, including the possible loss of principal. International investing may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments may be subject to higher volatility.High yielding stocks are often speculative, high risk investments. These companies can be paying out more than they can support and may reduce their dividends or stop paying dividends at any time, which could have a material adverse effect on the stock price of these companies and the Fund's performance. Increasing dividend yield may be indicative of decreasing value of the underlying holdings.
Carefully consider the Funds' investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds' prospectus, which may be obtained by calling 1-888-GX-FUND-1 (1.888.493.8631), or by visiting www.globalxfunds.com. Read the prospectus carefully before investing.
Global X Management Company, LLC serves as an advisor to the Global X Funds. The Funds are distributed by SEI Investments Distribution Co., which is not affiliated with Global X Management Company or any of its affiliates.
*Based on what IndexUniverse President of ETF Analytics Matt Hougan said in a recent appearance on CNBC on 1/13/13: http://www.indexuniverse.com/sections/features/15781-hougan-on-cnbc-top-5-etf-picks-for-2013.html
SOURCE Global X Funds