Due to the technology sector's burgeoning status as
destination for income investors, some of the sectors
dividend-paying members are becoming more prominent in
dividend-focused
ETFs
. Predictably, ETF and dividend investors alike want to know when
Apple (NASDAQ:
AAPL
), which earlier this year announced its first payout since 1995,
will join dividend funds.
At least one ETF issuer is providing an answer. WisdomTree
(NASDAQ:
WETF
) today announced the results of its annual index rebalancing,
noting that Apple will make its way into several of the issuers
dividend-focused funds later this month.
One of the indexes that has been rebalanced is the WisdomTree
Dividend Index (WTDI), the index tracked by the $268.4 million
WisdomTree Total Dividend Fund (NYSE:
DTD
). At the close of trading on December 21, Apple will become
DTD's
third-largest holding at a weight of just over
three percent
.
Other new additions to DTD include Las Vegas Sands (NYSE:
LVS
), Ford (NYSE:
F
) and Phillips 66 (NYSE:
PSX
).
The WisdomTree LargeCap Dividend Index (WTLDI), the index
tracked by the WisdomTree LargeCap Dividend Fund (NYSE:
DLN
), will also make room for Apple on December 21. The iPad maker
will become the index's
third-largest holding
behind Exxon Mobil (NYSE:
XOM
) and AT&T (NYSE:
T
). Apple will have a weight of almost 3.6 percent in that
index.
DLN, which has almost $1.3 billion in assets under management,
has a distribution yield of 6.86 percent,
according to WisdomTree data
.
Given the rise of technology names as dividend payers, it is
not surprising to see these stocks, Apple included, take on more
prominent roles in dividend ETFs.
"Information Technology sector dividends have grown a
remarkable 172.18% since November 30, 2007. At the prior peak,
this sector comprised only about 5.6% of the dividend stream,
whereas now it comprises more than 13% and is the third-largest
dividend-paying sector behind Consumer Staples and Financials,"
said WisdomTree Research Director Jeremy Schwartz
in a note
.
Not only that, but the technology sector is expected to be
home to the most robust dividend growth in the coming years due
to the massive cash hoards held by some of the group's
constituents. Along those lines, cash-rich Apple could double its
payout within three years,
Barron's reported in November
.
Schwartz notes there "were 124 additions to the U.S. dividend
stream this year, and they contributed an increase of about $17.3
billion. Over 50% of this increase comes from Apple-the
third-largest contributor to the dividend stream behind only
Exxon Mobil and AT&T at the November 30, 2012, screening
date."
Other WisdomTree ETFs that could see altered stakes in Apple
include the WisdomTree Total Earnings Fund (NYSE:
EXT
). The iPhone maker currently accounts for 3.2 percent of EXT's
weight, making it the fund's second-largest holding behind Exxon.
However, EXT's index, the WisdomTree Earnings Index (WTEI), will
push Apple to a weight of
over 4.2 percent when its rebalance goes into
effect on December 21
.
The WisdomTree Earnings 500 Fund (NYSE:
EPS
) is also likely to get a new look with Apple. That stock
currently accounts for 3.63 percent of the fund's weight, but the
WisdomTree Earnings 500 Index will rebalance as well,
pushing Apple to a weight of almost 4.86
percent
, making the stock the index's largest constituent.
For more on ETFs, click
here
.
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