And old line tech companies are increasingly rewarding shareholders with stronger dividends, which has helped propel the First Trust NASDAQ Technology Dividend Index Fund (NasdaqGM: TDIV) to an all-time high. TDIV turns two in August and has nearly $470 million in assets under management.
Outside of an almost 8% weight to Apple that makes the iPad maker TDIV’s fifth-largest holding, the ETF’s top-10 lineup looks a lot like that of XLK’s, but with different allocations. For example, Microsoft, Intel and Cisco combine for nearly a quarter of TDIV’s weight. [Tech ETFs Become Dividend Destinations]
Tech dividends are low compared to high-yielding sectors like utilities, but that also means there is room for payout growth. TDIV’s trailing 12-month distribution is just 2.3%, but that is far better than what investors will find on an Internet ETF and, more importantly, TDIV and the aforementioned old guard tech ETFs have not recently subjected investors to severe capital loss.
Technology Select Sector SPDR
Tom Lydon’s clients own shares of Apple, Cisco, Intel and Microsoft.