Microsoft (NasdaqGS: MSFT) shares were up in early trading Tuesday after the tech giant boosted its quarterly dividend and announced a $40 billion share buyback plan.
The news underscores how more tech companies are returning capital to shareholders in the form of dividends.
First Trust NASDAQ Technology Dividend Index Fund (NYSEArca: TDIV) is an ETF designed to capitalize on this trend.
The NASDAQ Technology Dividend Index screens for companies that have paid a regular or common dividend within the past year. They must pay a yield of at least 0.5% and not had a decrease in common dividends per share paid within past 12 months. [Technology Focused ETF with a Dividend Twist]
The index employs a modified dividend value weighting methodology, according to manager First Trust.
“Slowly but surely, dividends are becoming a more common characteristic of technology stocks,” S&P Capital IQ said in a note earlier this year.
The yield on tech names within the S&P 500 has “notably increased” over the past two and a half years, according to the report.