Many high dividend ETFs load up on utilities and consumer goods companies to generate income. While many of these stocks come with above average yields, these sectors are also getting stretched from a valuation perspective putting investors at risk for losing principal. It might be wise for investors to begin searching for other sources of income outside of these conservative, yet overpriced sectors. One intriguing option comes from a sector that isn't normally thought of as a high dividend area: technology.
The First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV) focuses on technology and telecom companies that have paid and not decreased their dividend in the past 12 months and yield at least 0.5%. It's a relatively low bar to clear but historically the fund has done a much better job in delivering income to investors. The fund currently yields 2.9%, well above the S&P 500 (NYSEARCA:SPY) yield of 2.1%.
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