With lingering worries about the tech sector sparking another decline in the Nasdaq Composite (COMP.IND) to start the week, investors find themselves in a conundrum. They are looking for safety in a volatile environment, while still wanting to keep exposure to the growth prospects built into the most innovative companies.
In this environment, the First Trust NASDAQ Technology Dividend Index ETF (NASDAQ:TDIV) has drawn attention, outperforming not only the Nasdaq but most other technology exchange traded funds YTD.
TDIV remains lower for 2022, hovering slightly above correction territory with a YTD performance of -9.8%. Even so, it has outperformed the Nasdaq and benchmark Invesco QQQ ETF (QQQ), which tracks the Nasdaq 100. Those indexes show declines of 14% and 13.8%, respectively.
TDIV has also outperformed many other of the market's most prominent tech ETFs this year. This includes Vanguard Information Technology ETF (VGT) -14.8%, Technology Select Sector SPDR Fund (XLK) -14%, VanEck Semiconductor ETF (SMH) -22.1%, and the First Trust Cloud Computing ETF (SKYY) -19.8%.
TDIV provides access to the NASDAQ Technology Dividend Index, which TDIV tracks. The fund also employs a modified dividend value weighting methodology to its base of stocks, making sure each holding has not had a decrease in common dividends per share paid within the past 12 months.
TDIV also has a 2.05% dividend yield that’s paid out quarterly and the fund has also amassed $1.79B assets under management, making it liquid in nature.
Moreover, TDIV rebalances itself quarterly and comes with a 0.50% expense ratio as well as 93 holdings led by International Business Machines Corp. (IBM) and Broadcom Inc. (AVGO) weighted at 8.37% and 8.02% respectively.
See a year-to-date performance chart of how TDIV has fared against the Nasdaq Composite.