Income-seeking investors often turn to ETFs for diversification and dividends, but is a high yield too good to be true? The Global X SuperDividend ETF offers a 10% yield, eight times the S&P 500 average. With 106 holdings, including international stocks, the ETF’s dividend safety is questionable, as shown by declining payments in recent years.

Investors may not recognize many stocks in the SuperDividend ETF, which includes international companies like Ithaca Energy and Guess. While the ETF has outperformed the S&P 500 this year, its focus on high yield hasn’t paid off in the long run, with a 30% decline in five years compared to the market’s 97% total return.

While past performance isn’t indicative of future results, the SuperDividend ETF’s high yield comes with risk, especially with exposure to international markets and tariffs. Investors should consider safer index funds for long-term stability, as relying solely on high yield can lead to capital losses. The ETF’s lack of quality vetting raises concerns about the stocks within.

Investors interested in the Global X SuperDividend ETF should exercise caution, as the focus on yield may not ensure quality or safety in the long term. The Motley Fool Stock Advisor team has identified 10 top stocks for potential high returns, but the SuperDividend ETF didn’t make the cut. Past returns of Stock Advisor have outperformed the S&P 500 significantly.

Read more at Yahoo Finance: The Global X SuperDividend ETF Pays 10%. Is It Too Good to Be True?