ETFs

TDV: A Fund Featuring Dividend-Paying Tech Stocks

Tech was the biggest payer of dividends among all S&P 500 sectors in 2021, according to CFRA.

It may surprise you that in 2021, the technology sector was the largest payer of dividends among sectors in the S&P 500 Index, according to investment research firm CFRA.

Tech stocks contributed more than 17% of the overall income for the broad-market benchmark. That's more than the contribution from healthcare (15%), financials (14%) and consumer staples (11%), notes CFRA. 

And yet, many exchange-traded funds that invest in companies with a track record of hiking dividends have relatively limited exposure to tech. The ProShares S&P 500 Dividend Aristocrats (NOBL), for example, which tracks an index requiring firms to have posted at least 25 consecutive years of dividend increases, holds 1.5% of assets in tech, compared with 22% in consumer staples. 

The ProShares S&P Technology Dividend Aristocrats (TDV) holds 77% of assets in tech stocks. Tracking an index that requires a minimum of just seven years of dividend hikes allows the fund to home in on tech names with the wherewithal to consistently return cash to shareholders. Holdings are equally weighted, so behemoths with giant market values can't dominate. The 40 stocks in the portfolio range from household names such as Apple (AAPL) and Broadcom (AVGO) to water-meter manufacturer Badger Meter (BMI) and pet pharmacy PetMed Express (PETS).

The ETF, yielding 1.2%, might be worth a look by dividend investors who want to balance out sector exposure or by tech investors who prefer the cushion of a dividend in an often-volatile sector.

Proshares S&P Technology Dividend Aristocrats ETF stats

SOURCES: CFRA, fund sponsors, Morningstar Direct, Yahoo Finance

Most Popular

5 Ways to Prepare for a Recession
recession

5 Ways to Prepare for a Recession

The signs seem to be pointing in one direction these days, so if you’re worried about being ready for a recession, consider taking these five measures…
June 28, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
In What Order Should You Tap Your Retirement Funds?
retirement planning

In What Order Should You Tap Your Retirement Funds?

Should you go with your IRA first or your brokerage account? Pulling money haphazardly can have negative implications. Instead follow this road map fo…
June 28, 2022

Recommended

Should You Prefer Preferred Stocks?
ETFs

Should You Prefer Preferred Stocks?

Preferred stocks and preferred stock ETFs may serve as a steady hand for income investors in an uncertain market.
June 23, 2022
Dogs of the Dow Are 2022's Best in Show
dividend stocks

Dogs of the Dow Are 2022's Best in Show

Some of the best investments for income investors in a volatile 2022 have come from the Dogs of the Dow.
June 22, 2022
New ESG Fund from Engine No. 1 Leans on Activism
ESG

New ESG Fund from Engine No. 1 Leans on Activism

The Engine No. 1 Transform Climate ETF (NETZ) offers an approach to sustainable investing that includes – wait for it – oil and gas companies.
June 14, 2022
The 12 Best ETFs to Battle a Bear Market
ETFs

The 12 Best ETFs to Battle a Bear Market

Investors worried about the next market downturn can find plenty of protection among exchange-traded funds (ETFs).
June 13, 2022