Recently, both Microsoft and Adobe provided good news, which boosted the price of QQQ, Invesco Powershares technology ETF . Microsoft announced an increase to their existing dividend payments program, and an expanded share buyback program worth billions. Adobe achieved record quarterly revenue of $1.46 billion with operating income growing 50 percent on a year over year basis.
Microsoft (MSFT) shares rose 1.4% in pre-market trading which was only 1.9% percent below MSFT’s fifty-two-week high price of $58.70. Microsoft plans to enhance its dividend by more than 8% to 39 cents per quarter beginning in November 2016. This increase comes one year later after MSFT announced a 16% increase in dividend payments in Q4 of 2015. The share buyback program is implemented to purchase $40 billion in shares by the end of 2016, which would reduce the number of outstanding MSFT shares by approximately 10%.
Microsoft is the second largest holding in the Powershares QQQ technology ETF representing a 7.86% total weight in the fund’s holdings. The largest holding in the QQQ ETF is of Apple which represents a weight of 10.23%. Other well performing technology companies such as Adobe, Amazon.com, Facebook, and Alphabet’s (formerly known as Google) Series C and D hold weights of 0.94%, 6.60%, 4.64%, and 8.68% in the QQQ ETF, respectively, as per Invesco’s Powershares QQQ June 30, 2016 fact sheet. The fund has a total expense ratio of 0.20%, a current year to date return of 4.68%, a 5 year return on fund NAV of 17.55%, and closed at $119.09 per share on September 22, 2016.
Other technology ETFs, including the Powershares QQQ ETF, also received a slight boost from Adobe as the company reported nearly 20% increase in earnings which boosted their revenues to $1.46 billion and assisted company shares increase almost 5% in stock market value. Adobe senior management is expecting even higher EPS returns before the end of year lead by their digital media and marketing cloud segments business divisions contrary to the concern of potential slow growth in the technology arena as expressed by some analysts.
Amazon.com (AMZN) and Alphabet (GOOGL) are hitting near all-time highs, and both firms are well represented in the Powershares QQQ ETF which tracks the tech and biotech heavy Nasdaq 100 index.
Technology ETF’s worth considering for your investment portfolio include:
- XLK – State Street Global Advisor’s Technology Select Sector SPRD Fund
- QQQ – Invesco Powershares QQQ Technology ETF
- VGT – Vanguard Information Technology ETF
- FDN – First Trust down Jones Internet Index Fund