Global X SuperDividend U.S. ETF vs. SPDR Portfolio S&P 500 High Dividend ETF: Which Is the Better High-Yield ETF?

Global X SuperDividend U.S. ETF (NYSEMKT: DIV) and SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD) both have a similar goal of buying high-yield stocks. However, they go about the effort in a slightly different way.

Is SPDR Portfolio S&P 500 High Dividend ETF's 4.1% yield a better bet than Global X SuperDividend U.S. ETF's 5.4% yield?

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

What does SPDR Portfolio S&P 500 Dividend ETF do?

SPDR Portfolio S&P 500 High Dividend ETF is incredibly simple to understand. It starts by looking at only the dividend-paying stocks within the S&P 500 (SNPINDEX: ^GSPC), which is a curated list of generally large companies meant to represent the broader U.S. economy. The dividend payers are lined up by dividend yield, from highest to lowest.

The 80 highest-yielding stocks get put into the ETF using an equal-weighting methodology, so that each stock has the same impact on overall performance. Aside from the equal-weighting bit, this is a pretty straightforward approach.

Image source: Getty Images.

What does Global X SuperDividend U.S. ETF do?

Global X SuperDividend U.S. ETF is a lot more complicated. It starts its screening by looking at beta, a measure of volatility relative to the broader market. A beta above 1 suggests the stock is more volatile than the market, while a beta below 1 suggests it is less volatile. Global X SuperDividend U.S. ETF only selects from stocks with betas equal to or less than 0.85. The next pass is to eliminate stocks with dividend yields below 1% or above 20%.

After that, the remaining stocks are checked to ensure that they have paid dividends for at least the last two years, and that the current dividend is at least equal to 50% of the previous year's dividend. This last one is interesting because it allows for companies that have cut their dividends to stay in the mix. From this final list, the 50 stocks with the highest dividend yields are selected. Like SPDR Portfolio S&P 500 High Dividend ETF, an equal-weighting methodology is applied.

Image source: Getty Images.

Beta versus the S&P 500 index... and equal weighting

Picking stocks using only a high yield as the determining factor is a risky approach to investing. The list of highest-yielding stocks will inherently include companies that are facing material problems and are, thus, out of favor on Wall Street for a good reason. So, both SPDR Portfolio S&P 500 High Dividend ETF and Global X SuperDividend U.S. ETF have taken steps to help reduce risk.

SPDR Portfolio S&P 500 High Dividend ETF is relying on the selection criteria of the S&P 500 index. The 500 or so stocks in the index are selected by a committee because they are large and economically important. That will, inherently, weed out less desirable companies over time.

Global X SuperDividend U.S. ETF uses beta, specifically attempting to find lower-volatility stocks. Eliminating yields over 20%, meanwhile, takes out the most outlandish yield situations that would likely require deep analysis to get a handle on.

The use of equal weighting by both of these exchange-traded funds (ETFs), meanwhile, effectively caps the damage any single stock can do to the performance of the overall portfolio. That said, it also places a limit on how much benefit is derived from any single investment. All in, however, risk control is an important aspect of both of these ETFs.

Beta appears to be a limiting factor

As the chart highlights, over time, Global X SuperDividend U.S. ETF has lagged behind SPDR Portfolio S&P 500 High Dividend ETF on a total return basis. Total return includes the reinvestment of dividends, so the graph basically takes into account the notable yield difference between the two ETFs.

SPYD Total Return Price data by YCharts

This chart is even more telling, however. It shows the price-only return with the total return. Essentially, the price-only return is what an investor who used the dividends to pay for living expenses would have seen. And the numbers are pretty bad for Global X SuperDividend U.S. ETF, which has lost about 25% of its value over the past decade.

SPDR Portfolio S&P 500 High Dividend ETF increased in value by about 45%. That's a massive 70-percentage point difference!

SPYD data by YCharts

One last chart showing the actual dividend payments each of these ETFs spit out will be informative. SPDR Portfolio S&P 500 High Dividend ETF's dividend is more volatile on a quarterly basis, but notice that it has trended above the dividend paid by Global X SuperDividend U.S. ETF. Global X SuperDividend U.S. ETF's dividend, meanwhile, has trended lower over time.

SPYD Dividend data by YCharts

This actually makes complete sense. With a growing asset base, SPDR Portfolio S&P 500 High Dividend ETF has more capital that allows it to produce more dividends. With a shrinking capital base, Global X SuperDividend U.S. ETF has less capital and, thus, less ability to generate dividends.

There's a pretty clear winner for dividend investors

If you are reinvesting your dividends or using them to pay for living expenses, SPDR Portfolio S&P 500 High Dividend ETF looks like a better long-term selection than Global X SuperDividend U.S. ETF. Simply put, adding beta into the mix has, so far anyway, proven too large a drag on performance to justify adding Global X SuperDividend U.S. ETF to an income portfolio.

This is unless, of course, you are specifically looking to limit near-term volatility during a period of market uncertainty. Such a tactic, however, is really just a short-term approach. If you are a buy-and-hold investor, SPDR Portfolio S&P 500 High Dividend ETF looks like the winner here.

Should you invest $1,000 in Global X Funds - Global X SuperDividend U.s. ETF right now?

Before you buy stock in Global X Funds - Global X SuperDividend U.s. ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Global X Funds - Global X SuperDividend U.s. ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $708,400!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of March 14, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.