TDIV vs XLK

TDIVBFirst Trust NASDAQ Technology Dividend Index Fund

XLKAState Street Technology Select Sector SPDR ETF

In short

TDIV In 2012, "tech dividend" still sounded like a contradiction. TDIV was built around it: roughly 90 technology and telecom payers, weighted by the dollars of dividends they actually hand out rather than by market cap.

XLK A 1998 original: XLK owns the technology slice of the S&P 500, about 70 names, for eight basis points. Big, heavily traded, and top-heavy by design, with quarterly caps the only brake on the giants at the top.

Stated mandate

TDIV The Fund seeks to track, before fees and expenses, the price and yield performance of the Nasdaq Technology Dividend Index. It normally invests at least 90% of assets in securities comprising that index.

XLK The fund seeks to track the price and yield performance of the Technology Select Sector Index before expenses.

Why people hold it

• TDIV Weighting runs on the dollar amount of dividends paid, not market cap or yield, so the largest positions are the sector's largest payers.nasdaqomx.comftportfolios.com
• Trading since 2012, one of the first funds to treat tech as an income sleeve, and now a multi-billion-dollar fund that distributes quarterly.
• The index sets 80% technology and 20% telecom at each rebalance, with caps designed to stop the biggest names from swamping the other 90-odd holdings.ftportfolios.comsec.gov
• Volume is respectable for a niche strategy, so buying and selling shares is rarely the friction point.

• XLK Costs 0.08% a year against a roughly 0.40% median for broad tech funds, tying FTEC as the cheapest of the category's top-rated names and undercutting VGT's 0.09%.
• One of the largest and most actively traded funds in the tech aisle, so entering or exiting rarely means fighting the order book.
• Running since December 1998 and dead simple: the tech sector of the S&P 500, spanning software, semiconductors, hardware, communications equipment and IT services. Pays quarterly.ssga.com

Worth knowing

• TDIV 0.50% a year sits above the typical index tracker in its group, where plain broad-market funds such as SCHK and SPYV charge a few basis points.
• One sector, about 90 names. Concentration is the design, and a handful of very large payers carry real weight in the outcome.sec.gov
• The dividend screen is the whole filter: tech companies that pay nothing never enter the index, and First Trust notes no holding is obliged to keep declaring dividends.sec.govftportfolios.com

• XLK Top-heavy by construction. About 70 stocks, and the index only trims its biggest weights at quarterly rebalances to stay inside fund diversification limits.spglobal.com
• The universe is S&P 500 tech only. Smaller tech companies outside the big index are out, and the Select Sector funds split the S&P 500 up, so some familiar names sit in other sector funds.ssga.com
• It is one sector with no ballast from the rest of the market, so a tech drawdown lands here in full.

Full TDIV profile⁠

Full XLK profile⁠