There are dividends, and then there are quality dividends. That’s the premise behind the Global X S&P 500 Quality Dividend ETF (QDIV) that debuted on Tuesday.
The latest product from Global X Funds tracks the S&P 500 Quality High Dividend Index that measures the performance of S&P 500 stocks that exhibit both high quality and high dividend yield characteristics. Specifically, the fund invests in companies that score in the top 200 of the S&P 500 both in terms of dividend yield and “quality” metrics including return-on-equity, accruals and financial leverage
According to Global X, overlaying a quality screen with dividend yield aims to isolate companies more likely to maintain their dividend payments through different economic cycles while offering upside potential in strong markets.
The underlying index is equal-weighted, and is reconstituted and rebalanced semi-annually. The fund begins trading with about 80 holdings. The top five comprises CA Inc., Campbell Soup Co., Assurant Inc., Comcast Corp. and Kraft Heinz Co.
QDIV expects to make monthly distributions and its expense ratio is 0.35 percent. It is the twelfth product in Global X’s $3 billion suite of income ETFs.