Similarly, share repurchases also surged following the tax holiday. In 2003, $115 billion of shares were bought back. In 2004 and 2005, this number surged to $202.7 billion and $336.5 billion, respectively, a cumulative increase of 193%.
“While there was an increase in capital expenditures, the enormous spikes in special dividends and share buybacks indicate that a large portion of repatriated assets were used to reward shareholders directly,” DiCesare said.
If history repeats itself, technology companies could once again account for the lion’s share of repatriated cash, and these tech firms may reward shareholders in the form of dividends and buybacks. ETF investors may also capitalize on the potential changes through sector-specific ETFs, such as Technology Select Sector SPDR Fund (NYSEArca: XLK), Vanguard Information Technology ETF (NYSEArca: VGT) and iShares U.S. Technology ETF (NYSEArca: IYW). Additionally, the First Trust NASDAQ Technology Dividend Index Fund (NasdaqGS: TDIV) may act as a targeted play on dividend-generating tech companies.
For more information on the tech sector, visit our technology category.