DESCRIPTION TheSolactive Global SuperDividendTM Index tracks the price movements in shares of the100international companies with the highest dividend yield subject to several qualitative dividend outlook checks. The components are weighted equally. Index adjustments are conducted annually with additional quarterly dividend sustainability checks. The index is a total return index and published in USD.
FACTSHEET-ASOF11-Mar-2025
SolactiveGlobalSuperDividendTMIndex
TOP COMPONENTS AS OF11-Mar-202
Company Ticker Country Currency IndexWeight(%)
KERRYPROPERTIESLTDORD 683HKEquity BM HKD 1.31% CHONGQINGRURALCOMMERCIAL-H 3618HKEquity CN HKD 1.28% HYSANDEVELOPMENTCOLTDORD 14HKEquity HK HKD 1.28% C&DINTERNATIONALINVESTMENTGROUPLTD 1908HKEquity KY HKD 1.27% ABRDNPLC ABDNLNEquity GB GBp 1.26% HANGLUNGGROUPLTDORD 10HKEquity HK HKD 1.25% KENONHOLDINGSLTD KENITEquity SG ILs 1.22% CITICTELECOMINTERNATIONALHO 1883HKEquity HK HKD 1.22% DNOASA DNONOEquity NO NOK 1.18% GROWTHPOINTPROPERTIESLTD GRTSJEquity ZA ZAr 1.15% PCCWLTDORD 8HKEquity HK HKD 1.15% SANSIRIPCL SIRITBEquity TH THB 1.14% GLOBALNETLEASEINC GNLUNEquity US USD 1.13% HKBNLTD 1310HKEquity KY HKD 1.13% VTECH(VTECH)HOLDINGSLTDORD 303HKEquity BM HKD 1.12%
FACTSHEET-ASOF11-Mar-2025 Solactive Global SuperDividendTM Index
A monthly dividend, almost 1% a month. Does that leave you slightly salivating, reader? You’d have to have dysfunctional salivary glands wouldn’t you?
It is tempting.
But is it safe. Let’s try to assess that.
SDIP is run by a large German index operator called Solactive.
The reason many avoid this ETF is historically capital losses appear to offset the rich dividend income. Over three years, shows SDIP as having a “continuous” 30% fall during which time is would’ve provided around a 33% income. Like a dragon consuming its own tail things are not going to end well….. apparently.
But look at just the past 1 year – the picture improves – capital losses are near zero.
Zooming out gives the best (and fairest?) picture of all. If you go back 13 years (I could only find this view on Solactive’s own web site to when you query your usual tools or your broker’s tools you can’t see this full picture for some reason)
Since inception, your capital AND dividend (total return) losses would actually be 10%
so while there are periods of growth 2020 and 2022 were periods of sharp loss (net of dividends)
SDIP is listed as an income stock in the UK – not accumulation.
So the question is what causes the capital to drop?
The index started with the Top 100 dividend payers across major markets. They then screen each quarter for any that have dropped below the Top 200 (i.e. 100 worse than the top 100) and replace them. They also screen for dividend cuts or an overall negative outlook concerning the companies’ dividend policy (“Dividend Cut Review Date”). Theoretically if you’ve got a high yield company that is in financial trouble it doesn’t get picked. Certainly all of the samples I took were well established – I share some examples below.
If any changes need to be implemented, the index will be adjusted at the close of the last trading day of the month. Companies may be excluded on quarterly reviews and replaced with the top ranked company from the selection pool that is currently not an index member (i.e. position 101). The company that is added to the index composition at the quarterly review dates will be given the same weight as the member that will be deleted, calculated as of the trading day before the adjustment takes place.
Also SDIP is rebalanced quarterly over a five-day period (“Rebalancing Period”). Beginning on the Adjustment Day, and continuing until the fourth Trading Day following the Adjustment Day. Essentially the winners are sold and the losers are bought each quarter.
Any Corporate Action event such as acquisition, tender offer, dividends paid etc etc is also considered and a formula is used to rebalance the holding. The formula below means that if I hold 100 units of share X with an index price of £100 (P) then receive a £10 dividend (D) this means I now need to hold 111 units instead. This assumes the £10 is tax free (no dividend correcting factor).
So the largest percentage dividends lead to me holding proportionately more of that share.
If I also have 100 units of Share Y also £100 and that pays 8%. Then 100 X (100/100-8) = 108.7 units. So the 10% share “crowds out” the 8% share over time.
In other words reader SDIP is a cold, calculating index relentlessly pursuing high dividends and capital gains or losses are immaterial to its judgment.
EXAMPLE HOLDINGS: 3 of the 100
I’m not going to go through all 100 holdings but digging in to some examples here’s what I found.
1 Holding China Overseas Grand Oceans
Land Bank in Eastern China. Share price has halved in the past year and the dividend has been cut. Housing is in all sorts of trouble in China with 25m-30m unsold properties. It paid a 10% dividend but that is now 5.7%. This is an example of a holding that will get removed from the index, at the end of the quarter.
Meanwhile its share price has fallen, so rebalancing would’ve meant buying more each quarter to rebalance it.
2 Orient Overseas – Chinese Shipping Co.
Dividends in 2022 were $3bn, and $0.6bn in 2023. An 80% cut. Ouch.
The Red Sea Houthi crisis, the Chinese economic downturn and falling shipping rates have all affected Orient Overseas.
3 African Rainbow Minerals
Produced 16.7Mt of coal in 2023 and 581koz of PGMs. The dividend is around 9.5% and while it reduced in 2023, due to PGM basket falling it remains high.
In the SDIP Top 100 I see British names of BATS, VOD, Serica, M&G, DEC among the Top 100. That gives you an idea as to how they arrive at their top 100 list. Big established companies with big dividends, but cyclicals which do well in boom not bust.
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Note the date: so some of the information may have changed but as always best to DYOR before committing any of your hard earned. GL
Share price total return outperformed the FTSE Actuaries All-Share Index with a total return of 15.9% for 2024, compared with 9.5%.
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NAV total return with debt and Independent Professional Services (“IPS”) business at fair value for FY 2024 of 13.6% (13.2% with debt at par).
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A solid performance from IPS, with net revenue increasing by 6.2% and valuation up 5.1% to £194.5 million (excluding net assets).
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Belt and Braces.
A dividend hero but sadly the yield of 3.8% too low for the Snowball.
Dividend Highlights
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Proposed 2024 dividend increase of 4.7% to 33.5 pence per Ordinary Share (2023: 32.0 pence per Ordinary Share) compared to Group revenue return per share of 33.48 pence.
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Dividend yield of 3.8% (based on our closing share price of 884 pence on 11 March 2025).
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Over the last 10 years, we have increased the dividend by 113.4% in aggregate (7.9% CAGR), reflecting strong IPS cashflow and good Portfolio performance.
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We have a strong reserve position, and the Board is confident in achieving continued growth of dividends over time, building on our record of 46 years of increasing or maintaining dividends to shareholders.
It’s been 10 years since pension freedoms were introduced and one mantra has stood the test-of-time to ensure retirees don’t run out of money – the 4% pension rule.
Pension freedoms were introduced by then-chancellor George Osborne in April 2015, letting investors access their hard-earned pension pot from age 55 without the requirement to take an annuity or enter drawdown.
This has raised fears that people would run out of money, making it important to plan how you use the funds.
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Deciding when to start accessing your pension savings, and how much to withdraw, can be tricky.
After years of setting money aside, you will have the freedom to withdraw money as you please, and spend it on the lifestyle you desire.
This decision can influence how long the money lasts – and ultimately how comfortable your retirement is.
As well as hopefully enjoying the returns from your pension savings, money still needs to be available for bills and possibly your own long-term care.
That is especially important as the cost of retirement is rising. Inflation rose to 3% in January, and could increase further this year amid Trump tariffs and ongoing geopolitical tensions. “It’s well known that most people are starting to plan for their retirement too late in life and do not have enough saved for a comfortable retirement,” Brian Byrnes, head of personal finance at Moneybox, tells MoneyWeek.
Research from the Pensions and Lifetime Savings Association, a trade body, suggests retirees need an income of £43,100 per year for a “comfortable retirement”. For a couple, the joint figure needed is £59,000 a year.
However, research by Fidelity shows how a rule called the 4% pension rule may be able to help you plan your retirement, and ensure your money lasts as long as you do.
Using historical market data, Fidelity modelled how a £100,000 pension pot invested in global shares would have performed over the decade, when setting withdrawals at 4% and increasing them each year by inflation.
It found that a pension pot worth £100,000 from 2015 onwards would now have £189,000 remaining – nearly double their starting amount.
In contrast, a withdrawal rate of 5% would have left a retiree with £169,809 after 10 years, dropping to £150,642 if taking 6% and £131,474 at 7%.
Withdrawals
Total withdrawn
Pot left after 10 years
Lowest value
4%
£47,779
£188,977
£81,660 (11/02/2016)
5%
£59,749
£169,809
£80,771 (11/02/2016)
6%
£71,698
£150,642
£76,537 (23/03/2020)
7%
£83,648
£131,474
£71,925 (23/03/2020)
We explain what the 4% rule is and how it works.
What is the 4% pension rule?
The rule states that retirees should take 4% of their fund in the first year of withdrawals, and the same monetary amount (adjusted for the rate of inflation) year.
For example, if your pension pot is worth £500,000, you could withdraw £20,000 in the first year of your retirement. If inflation is 2% during that year, then in the second year you would withdraw £20,400.
This should ensure that your pension pot will support you through a 30-year retirement, in almost any economic environment. For that reason it is often referred to as the “safe withdrawal rate”.
Academics at the American Association of Individual Investors devised the 4% rule in 1998 after researching a sustainable withdrawal rate for a retirement pot that wouldn’t deplete the savings.
It looked at data from 1926 to 1995 and found that a rate of 3-4% is “extremely unlikely to exhaust any portfolio of stocks and bonds”.
“As a rule of thumb, the 4% rule is a good place to start when thinking about how much you need to save for retirement,” Olly Cheng, director of financial planning at Rathbones Group, tells MoneyWeek. “It is a nice benchmark rate to use, and therefore lets people set a simple target to see if they are on track with their savings.”
Can I rely solely on the 4% rule?
It is worth thinking about when to start accessing your pension pot, as market returns will have an influence on the success of the 4% rule.
A study from Morningstar in 2022 argued that 3.3% is the “safe” level of drawdown in order to protect a portfolio’s value over the long term.
However, this was based on the fairly downbeat market conditions at the time. Morningstar’s latest insight on the matter suggests that, with today’s more favourable market conditions, a 4% starting drawdown is once again safe.
Market conditions impact the 4% rule because it is based on the assumption that, over a 30-year period, a balanced portfolio (usually modelled as a 50/50 or 60/40 portfolio) will generate sufficient returns to cover the impact of 4% withdrawals annually.
This is true on average, over a 30-year period. Some years, though, a balanced portfolio will grow at less than 4%, and it may even fall in value.
According to Morningstar, in 2022 the average 50/50 portfolio lost 16% of its value. This is why Morningstar recommended a lower safe withdrawal rate for people retiring that year; withdrawing the full 4% would have further compounded their pension pot’s losses during the bad year, before it had a chance to gain value in any good years.
For that reason, it pays to check the economic outlook carefully, and research the safe withdrawal rate for your first year in retirement before jumping straight in with a 4% withdrawal rate. The good news is that it is only during particularly bad years that 4% isn’t a safe initial drawdown rate, which is why this rule of thumb has, on the whole, stood the rest of time.
As useful as the 4% rule is, Ed Monk, associate director at Fidelity International, adds that past performance doesn;t guarantee future results.
He said: “At a high level it is clear markets have been kind to the first cohort retiring under pensions freedoms with quick recoveries from setbacks like the pandemic avoiding low-price asset sales for income.
“In 2015, those choosing market investments over annuities benefited more. A £100,000 annuity paid £5,304 annually, but market investments provided similar or higher income and often a larger remaining pot.
“Future retirees may not be as fortunate. To mitigate risks, keep a cash reserve for two to three years of income to avoid selling investments during downturns. While it’s important to prevent running out of money, being overly cautious could also mean not making the most of your income.”
When should you retire?
Timing your retirement is a key decision. Ideally, you’ll retire in a good year for your portfolio. In any given 30-year period there are bound to be some bad years, but you want your pension pot to have registered some gains during the good years before these come around.
While hard to predict in advance, it is worth checking the economic outlook when you first start thinking about retiring. If the outlook is bad, and you feel you can still manage a year or two more of work, then it could be worth delaying your retirement and giving your pension pot a better chance of getting off to a good start.
This has the added benefit of fattening it up through your working income beforehand, and reducing the amount of time it will need to last you. All these factors swing the maths in your favour, and increase your chances of enjoying a comfortable retirement.
Of course, it is impossible to know in advance whether next year will be a better or worse year to retire than this one. Plus, there are many reasons why you may not want, or be able, to postpone your retirement for an extra year.
For this reason, John Corbyn, pensions specialist at the wealth manager Quilter, suggests making more conservative withdrawals early in your retirement, especially if you do happen to retire during a period of economic downturn.
What else do I need to know about the 4% rule?
Like all rules of thumb, says Corbyn, the 4% concept is based on certain assumptions.
“It needs to be overlaid with someone’s state of health and propensity to spend, which is likely to be higher for younger clients and lower for older clients,” he says.
“Care needs to be taken to ensure the attitude to risk and propensity for loss is also built into these assumptions.
“Depending on your risk tolerance, investment strategy, and the actual returns you get, you might consider a slightly more conservative withdrawal rate.”
Corbyn says it is crucial to continuously review and adjust your strategy based on your actual investment returns, spending needs, and the broader economic landscape.
“Ultimately, pensions are a long-term savings vehicle and potentially may need to pay for someone’s income for up to 30-40 years, and care needs to be taken if the fund is accessed early, as short-term gain may lead to long-term pain so getting advice is key,” he adds.
According to Cheng, retirement expenditure isn’t usually a flat annual amount, with the early years sometimes showing a higher expenditure when people want to travel, before expenditure starts to reduce slightly. He comments: “In the final years of their lives, many people will then see a further spike in expenditure as care is required.”
It’s important to note that this strategy may not work for everyone and is just one of many factors to consider when planning to retire.
Make a retirement plan
What you plan to do with your retirement will also have a huge impact on when you should start accessing your pension pot, so it’s a good idea to know what you want to do and the costs of doing it.
“If you have dreams of travelling the world then you might need much more retirement income than if you are content with a quiet life at home,” says Corbyn.
“It’s essential to have a realistic projection of your monthly and yearly expenses, including contingencies for unexpected costs.”
Cheng echoes this, saying “there is often a real benefit to undertaking some more detailed cash flow planning and speaking to an adviser”.
According to Moneybox data, just 11% of people are confident they will have a comfortable retirement. It is therefore vital that retirees have access to the right drawdown advice, and understand when to retire, and how much to withdraw, says Byrnes.
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Dilemma. A choice between two or more options, none of which is attractive.
Schroder European Real Estate has reported a NAV total return of 0.4% for the year ending 30/09/2024, having paid dividends per share of 5.92 euro cents. The dividend was 103% covered by EPRA earnings, which were up 3% on the previous year thanks to rental growth outpacing interest costs.
Dividends offset a decline in the portfolio value of 3.6%, due primarily to outward yield movement in the first half of the year. The manager notes that recent evidence suggests a stabilisation of values, and has observed an increase in investment volumes for smaller lot sizes in desirable cities.
During the year, the company strengthened its balance sheet, completing all near-term refinancings which means the average interest cost is just 3.2%. No debt is due to expire until June 2025.
The loan-to-value is a modest 25% net of cash, and the manager has c. €25 million of cash available for investment or other uses. Management is working on the disposal of Seville, which if successful, will reduce gearing to 22% net of cash.
Over the period, SERE’s discount has narrowed but still stands at an attractive c. 33%. This compares to a c. 21% average for the AIC Property – Europe sector and 22% for the AIC Property – UK Commercial sector.
The manager is focusing on capitalising on portfolio reversion to enhance earnings. There are key lease regearings pending which management believe will strengthen the income profile and drive a re-rating.
The board notes that the French tax authorities are proceeding with a tax audit. Although they note the potential exposure is up to €12.6m (excluding penalties), they do not believe an outflow is probable, based on professional advice, so have not recognised a provision in the NAV.
Sir Julian Berney Bt., chair, said: “Looking ahead, we expect to continue reaping benefits from a high-quality portfolio with strong occupancy rates located in key European cities. As inflation eases and interest rates fall, we expect sentiment to continue to improve and larger economies and cities are poised for enhanced growth.”
Kepler View
Schroder European Real Estate’s (SERE) main attraction is the high yield which is magnified by the current wide discount. The fully-covered dividend would equate to a c. 7.2% yield on the share price at the time of writing. This is backed by a portfolio which is 96% occupied, and after 100% of rent due was collected for the year. Management completed 16 new leases or re-gears over the 12 months under review with a weighted average life of 8 years.
The income outlook is also supported by the attractive gearing position. SERE has a modest level of gearing which locks in a low average rate of 3.2% over a weighted average life of 2.8 years. The rearranged facilities marginally increased the average cost of debt (to 3.2%) but positively extended the weighted life by 13 months. Also of note is the indexation of the portfolio income: around 80% of the company’s income is indexed to inflation, with the remainder linked to a hurdle rate, typically of 10%. A key issue for investors to watch will be what happens as the two largest tenants reach the end of their leases. The lease of KPN, which pays 18% of the portfolio income, is up in 2.3 years, and that of Hornbach, which pays 11%, is up in 1.3 years. We think any positive news on new terms could be significant when it comes to investor perception of risk and the appropriate share price discount. Additionally, we think that there is scope for the discount to narrow if there is a positive outcome from the tax audit.
A small decline in the value of the property portfolio over the period was expected and modest, but hopefully reflects the end of a tough period for real estate amid high inflation and interest rates. Almost all the write-down was taken in the first half ending in March, which therefore pre-dates the ECB’s rate cuts which began in June and have taken the key lending rate from 4.5% to 3.4%. It is encouraging to hear from the manager his observations that a pick up in activity seems underway, and further rate cuts are widely expected which should improve the backdrop even more.
There are concerns around the outlook for European economies, but SERE should benefit from a relatively defensive positioning in high quality locations and properties. Approximately 33% of the portfolio by value is offices, which are in supply-constrained locations and leased off affordable rents. The industrial exposure of 30% is a mixture of distribution warehouses and light industrial accommodation in growth cities within France and The Netherlands. The retail exposure is limited to 17% and comprises DIY and grocery investments rather than fashion and other discretionary sectors. SERE also has 9% of the portfolio allocated to the alternatives sector, comprising a mixed-use data centre and a car showroom. Substantial cash on the balance sheet provides firepower for asset management initiatives, buybacks or other measures.
Apax Global Alpha Ltd ex-dividend date JPMorgan Emerging Markets Investment Trust PLC ex-dividend date Real Estate Credit Investments Ltd ex-dividend date Safestore Holdings PLC ex-dividend date Schroder Real Estate Investment Trust Ltd ex-dividend date Tritax Big Box REIT PLC ex-dividend date Warehouse REIT PLC ex-dividend date
A reminder the Snowball owns mainly Investment Trusts where the aim is to provide a ‘secure’ dividend, although no dividend is ever completely secure.
If the Trust is trading at a discount to NAV there may be an opportunity to take some of Mr. Markets money and re-invest it in a higher yielder to grow your Snowball but this is only a secondary consideration
For any new readers, the rules for the Snowball.
There are only 3
One.
Buy Investment Trusts that pay a ‘secure’ dividend and use those dividends to buy more Trusts that pay a ‘secure’ dividend.
Two
Any Trust that drastically changes it’s dividend policy, must be sold, even at a loss.
