“Further, between 2011 and May 2013, the information technology sector has seen an 18.9% increase in the number of dividend payers. The next highest single sector is health care, which saw a 10.3% boost. This increase has not been lost on investors,” S&P said.
Tech companies paying dividends have made the stocks attractive to a wider group of investors.
Looking at TDIV, the ETF’s industry exposure “is a bit different than other technology focused funds, which is not surprising, given the priority given to dividends,” according to S&P. “Its largest sector exposure is semiconductors and semiconductor equipment, an area that tends to pay dividends.”
Microsoft on Tuesday said its new share repurchase plan replaces a previous $40 billion program that was set to expire at the end of September. ETFs that incorporate buybacks into the strategies have been solid performers this year. They include PowerShares Buyback Achievers (NYSEArca: PKW), AdvisorShares TrimTabs Float Shrink ETF (NYSEArca: TTFS) and Guggenheim Insider Sentiment (NYSEArca: NFO). [Buyback ETF Thrashing the Market Up Nearly $1 Billion in 2013]
First Trust NASDAQ Technology Dividend Index Fund
Full disclosure: Tom Lydon’s clients own MSFT.