Earnings season in the technology space received a welcome
surprise from Intel Corporation (NASDAQ:
) this week, which reported better-than-expected revenue and
The semiconductor behemoth pays a healthy three-percent yield
and just recently hit new 52-week highs on the expectations for
future growth in its core processor business.
Two other technology dividend giants, Apple Computer (NASDAQ:
) and IBM (NYSE:
), also just recently announced a new partnership designed to
cross-promote core business initiatives. Apple and IBM will
co-develop new applications for business users, as well as offer
IBM clients access to Apple's consumer products suite.
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One ETF that is set to benefit from both of these
announcements is the First Trust Technology Dividend ETF (
). This fundamentally weighted ETF tracks approximately 90
stocks in the technology and telecommunications sector that are
focused on returning value to shareholders through dividend and
share repurchase strategies.
This ETF currently has $587 million in total assets and
charges an annual expense ratio of 0.50 percent. Intel,
Apple and IBM represent three of the five top holdings in TDIV,
which has a 30-day SEC yield of 2.68 percent as well. The
allocation of each underlying stock in TDIV is calculated
according to the size of its dividend.
So far this year, TDIV has gained 12.45 percent and recently
hit a new all-time high. This performance bests the
industry benchmark Technology Select Sector SPDR (NYSE:
) return of 11.68 percent over the same time frame.
For the moment, TDIV is the only ETF that is focused squarely
on dividend paying companies in the technology space, and it has
been seeing steady inflows as a result. Many of the
large-cap holdings in this fund are considered to be mature and
stable alternatives to high-beta software or social media names
that are focused on using cash to fund growth initiatives.
TDIV will be one ETF to watch closely, as other top holdings
such as Microsoft and Cisco report earnings in the near future as
Disclosure: The author owned TDIV at the time this article was
© 2014 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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