Shares of Apple, 15% of XLK’s weight, are up 15.6% in the past 90 days, indicating that it is not a coincidence that the stock and the ETF both hit new 52-week highs on Thursday. [Tactical Strategies With Sector ETFs]
Another positive catalyst for XLK and rival funds has been the tech sector’s dividend growth. One of the largest contributors to S&P 500 dividend growth, the tech sector’s increasing dividend footprint has been on display in 2014. [Tech ETFs Turn Into Dividend Plays]
The average payout increase from Apple, IBM, Cisco and Qualcomm this year is almost 14%. Those stocks combine for 28.3% of XLK’s weight. That does not include an increase from Microsoft, which XLK’s second-largest holding usually delivers in the second half of the year. Microsoft’s last two dividend increases were 21.7% and 15%, respectively.
Technology Select Sector SPDR
Tom Lydon’s clients own shares of Apple, Cisco and Microsoft.