First Trust NASDAQ Technology Dividend Index Fund

TDIV

Market cap $3.81B

AI stole the spotlight, but dividend investors still have ways to benefit. You do not need tech stocks to profit from the AI boom. Three overlooked income plays linked to AI growth.

Mainstay Capital Management bought 961,923 shares; estimated trade size ~$94.84 million based on quarterly average pricing. Post-transaction, the position value is $94.84 million, reflecting the new purchase.

First Trust NASDAQ Technology Dividend Index Fund ETF is rated a Buy, driven by its structural semis exposure and AI infrastructure tailwinds. TDIV has transformed from defensive tech to a high-growth play, outperforming both S&P 500 and NDX in recent years despite lacking mega-cap tech names. The ETF's methodology favors large-cap, cash-flow-rich semiconductor companies, benefiting from secular AI-driven demand and robust dividend payouts (~1.3% yield).

It's not easy to beat the incredibly popular Vanguard Total Stock Market Index Fund ETF (NYSEARCA:VTI), an ETF that's even broader than the S&P 500, in any given year.

Many investors don't readily think of dividends and tech together, but there's more than meets the eye with this union.

First Trust NASDAQ Technology Dividend Index Fund (TDIV) offers risk-averse investors tech exposure with lower valuations and more mature, dividend-paying companies. TDIV's defensive approach delivers similar returns to growth-focused peers like VGT, with lower volatility, better diversification, and a modest yield advantage after expenses. The ETF is more concentrated in semiconductors and telecom, spreads top holdings better than VGT, and maintains a lower P/E and P/B ratio.

These ETFs are great for investors who want both dividends and growth. All of these ETFs have outperformed the S&P 500's total return.

Investing in tech is essential for strong returns, but volatility deters risk-averse investors. TDIV ETF provides lower-risk access to tech by focusing on dividend-paying, established companies. The ETF offers diversification across 90 tech stocks, reducing single-stock risk and enhancing portfolio stability.

Dividend ETFs like TDV, TDIV, and GCOW are hitting 52-week highs as market volatility has boosted demand for steady income.

First Trust NASDAQ Technology Dividend Index Fund warrants a sell rating due to its suboptimal performance compared to specialized tech and dividend ETFs. TDIV's long-term share price return lags tech-focused ETFs like VGT, while costing investors with higher fees through its expense ratio. A mix of VGT (25%) and SCHD (75%) offers superior capital appreciation, higher dividend yield, and lower overall fees compared to TDIV.