A highly traded ETF indexed to the Nasdaq-100 rose in early dealings Monday along with its largest portfolio holding after Apple (NasdaqGS: AAPL) announced a $2.65-a-share dividend as well as a stock buyback plan.
Apple represents 18.4% of PowerShares QQQ (NasdaqGM: QQQ). The Nasdaq-100 ETF, which many investors use as a proxy for the tech sector, is up 19.2% year to date, compared with a 12.2% gain for the S&P 500, according to Morningstar.
Apple shares will have a yield of 1.8% based on the dividend announcement. The move will expand the pool of investment funds that can invest in the stock, and the dividend could be raised further in the future, Wall Street analysts said.
The company also unveiled a $10 billion stock repurchase plan.
Apple shares have rallied 44.6% so far this year. The company recently rolled out the new iPad, although the iPhone “remains the most important device in Apple’s product portfolio,” says Morningstar analyst Michael Holt.
“Nonetheless, the tablet market could challenge the PC market in terms of unit shipments during the next 10 years and the iPad is establishing itself as the second-most important device driving Apple’s success,” he added.
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.