Mature tech companies, such as Apple and Microsoft, can help investors generate income by way of steadily increasing dividends. That is a departure from the tech boom of the 1990s when dividends were a foreign concept to the sector.
Traditionally, tech companies have not considered paying back their investors. Instead, many firms opted to reinvest cash back into the company or buy back stocks.
However, times are changing, and the technology sector of the S&P 500 is now among the top dividend issuers. Technology companies began to compensate shareholders during the financial crisis, and the habit stuck.
“XLK is constructed using a market-cap weighted methodology that gives the lion’s share of the assets to the largest stocks. As a result, AAPL represents nearly 14% of the underlying asset allocation,” adds See It Market. “When it comes to size and liquidity, this fund has everyone else beat hands down. XLK has $13.87 billion in total assets and trades average daily volume of more than 11 million shares per day. Furthermore, this technology ETF only charges a modest 0.14% expense ratio as its ongoing management fee.”
Technology Select Sector SPDR
