Year-to-date, IYW and FTEC have added $7.6 million and $46.5 million in new assets, respectively. While Apple has the potential to alleviate some of the recent pressure on tech ETFs, the long-term case for the funds highlighted here remains sturdy.
Tech’s increased credibility as a legitimate dividend destination also boosts the allure of ETFs like IYW. In 2014, the average dividend increase from Apple, IBM, Cisco (NasdaqGS: CSCO) and Qualcomm (NasdaqGS: QCOM) was 14%. Importantly, the tech sector has ample room for dividend growth.
“Some industry-leading companies have been hoarding cash. Consider that four information-age bellwethers―Apple, Microsoft, Google and Cisco―possess a combined $345 billion in cash. And the overall tech sector holds more than half of total corporate cash reserves in the U.S.,” said BlackRock Global Investment Strategist Heidi Richardson in a recent note. “With strong balance sheets, these companies are well-positioned to deliver returns through share repurchases, dividend increases and mergers and acquisitions.” [Time to Embrace Old Tech ETFs Again]
Technology Select Sector SPDR
Tom Lydon’s clients own shares of Apple and Microsoft.