TDIV - TDIV: Solid Tech ETF But Dividend Growth Isn't Strong

2024-06-21 04:10:05 ET

Summary

• First Trust NASDAQ Technology Dividend Index Fund ETF offers exposure to the tech sector while maintaining a dividend yield of 1.4%.
• The filtering strategy for holdings focuses on history, rather than forward-looking potential. As a result, TDIV's holdings don't include some strong tech companies.
• There are alternative dividend ETFs that offer a better dividend growth rate, such as SCHD.

Overview

One of the biggest gripes I have with most dividend ETFs is that they lack any meaningful exposure to sectors that have more growth oriented holdings. For example, iShares Select Dividend ETF ( DVY ) is mostly comprised of exposure related to the utilities sector, which is known for its stability and high dividend paying companies, and not for its fast growth. This issue gets addressed by the First Trust NASDAQ Technology Dividend Index Fund ETF ( TDIV ), which has a majority focus on technology-based exposure. However, there are some issues that I have with TDIV, which I will also cover here....

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