Global X warns of ASX dividend traps and concentration

Global X has issued a warning to investors and wealth managers regarding misleading dividend yields and high concentration within the Australian Securities Exchange (ASX). The ETF provider noted that dividends are heavily concentrated, with the ASX 20 accounting for more than 70 per cent of dividends paid in 2025.

The firm cautioned against relying solely on dividend yields, which can be artificially inflated if a share price falls due to a deteriorating business. For instance, Nine Entertainment reported a dividend yield as high as 51.2 per cent due to a one-off special dividend, despite a forecast yield in the single digits for 2026.

To mitigate these risks, Global X utilizes an investment approach based on forward dividend guidance, diversification, and screening for inflated yields. One of its primary products, the $100 million Global X S&P/ASX 200 High Dividend ETF (ZYAU), focuses on high-dividend Australian companies using these forecasting methods.