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By: The ETF Professor

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.

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 (NASDAQ:TDIV).

The First Trust NASDAQ Technology Dividend Index Fund, which debuted in mid-August, re-balances 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 (NASDAQ:WDC). Nine stocks, including France Telecom (FTE), Taiwan Semiconductor (NYSE:TSM) and Virgin Media (NASDAQ:VMED) are being removed from the index.

For more on Apple and dividend ETFs, click here.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Source: Apple Could Be Headed To Tech Dividend ETF