Apple (NASDAQ:
AAPL
), still the largest company by market value listed on the
Nasdaq, does not have a storied dividend history. However, the
$2.65 per share quarterly payout rolled out by the company last
year, good for a current dividend yield of just 2.5 percent, is
enough to earn Apple shares a spot in the NASDAQ Technology
Dividend Index (NASDAQ: NQ96DIVUS).
The change will become effective prior to open of markets on
Monday March 18. The NASDAQ Technology Dividend Index is the
index tracked by the First Trust NASDAQ Technology Dividend Index
Fund (NYSE:
TDIV
).
The First Trust NASDAQ Technology Dividend Index Fund, which
debuted in mid-August, rebalances quarterly. TDIV's index "is
evaluated semi-annually in March and September, but if at any
time during the year other than the evaluation, an index security
no longer meets the eligibility criteria, or is otherwise
determined to have become ineligible for inclusion in the index,
the security is removed from the Index and is not replaced,"
according to First Trust
.
The index includes up to 100 Technology and Telecommunications
companies that pay a regular or common dividend,
according to a statement issued by Nasdaq OMX
. TDIV, which is currently home to 73 stocks, allocates 80
percent of its weight to technology firms and the remaining 20
percent to telecommunications names.
Although Apple was paying a dividend when the ETF debuted, the
stock was not immediately eligible for inclusion in the fund
because Apple did not have a dividend track record of at least
one year. Now Apple meets that requirement, though it should be
noted First Trust has not confirmed Apple will be added to TDIV's
roster.
TDIV's weighting methodology seeks to prevent large
allocations to any of its individual holdings, although Cisco
(NASDAQ:
CSCO
), International Business Machines (NYSE:
IBM
) and Intel (NASDAQ:
INTC
) combine for over 24 percent of the ETF's weight. Other top
holdings include Microsoft (NASDAQ:
MSFT
) and Hewlett-Packard (NYSE:
HPQ
).
TDIV may have appeared to be too much of a niche play when it
first debuted, but the ETF has silenced critics by capitalizing
on the fact that technology is the largest U.S. dividend-paying
sector in dollar terms. That factor has helped make TDIV
arguably one of the more compelling dividend ETFs
to come to market in the past year
.
Since its debut, TDIV has raked in almost $71.4 million in
assets under management and has returned nearly seven percent,
outperforming the Nasdaq 100 along the way.
In addition to Apple, 14 other stocks will be added to the
NASDAQ Technology Dividend Index. Those names include America
Movil (NYSE:
AMX
), Broadcom (NASDAQ:
BRCM
) and Western Digital (NYSE:
WDC
). Nine stocks, including France Telecom (NYSE:
FTE
), Taiwan Semiconductor (NYSE:
TSM
) and Virgin Media (NYSE:
VMED
) are being removed from the index.
For more on Apple and dividend
ETFs
, click
here
.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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