Microsoft Announces Dividend Increase, DGRW Captures

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Tech giant Microsoft has announcement that it will increase quarterly dividends by 10% over last quarter’s dividend, an increase of six cents to $0.68 per share.

Beginning at the end of the day on October 12, this year’s Microsoft shareholders will also be able to vote for their shares at the December 13, 2022 annual general meeting of shareholders, which will be hosted virtually by Satya Nadella, Chairman and Chief Executive Officer. General of Microsoft.

Microsoft is part of most portfolios and has a presence on more than 500 ETFs. As a dividend-paying company, it likely increased its weighting in portfolios this year as many advisors and investors turned to dividend-paying companies during tough market times. Dividend funds have been extremely popular in 2022, and with market uncertainty seemingly lingering, they will likely remain a strong play in the final quarter of the year.

The WisdomTree US Quality Dividend Growth Fund (DGRW) invests in large capitalization US companies that are increasing their dividends and applies quality and growth criteria to securities. The fund seeks to track the WisdomTree US Quality Dividend Growth Index, a fundamentally weighted index based on dividend projections for the next year, which selects companies based on long-term growth expectations, return on equity and return on assets.

“DGRW takes a more forward-looking approach to dividend growth compared to other ETFs, which has resulted in higher exposure to information technology companies. Many tech companies haven’t seen 10 let alone 20 years of dividend growth, but are well positioned to return cash to shareholders in the future,” explained Todd Rosenbluth, head of research at VettaFi.

Microsoft Corp (MSFT) is the third largest holding in the fund with a weighting of 4.12%, preceded by Johnson & Johnson (JNJ) at 5.11% by weight and Apple Inc. (AAPL) at 5.13% by weight.

DGRW continues to see healthy and sustained inflows this year. During the last month (08/16/2022-09/16/2022), the fund recorded net flows of $292.43 million. In the past three months, DGRW recorded net flows of $660.68 million.

The index is made up of the 300 companies in the WisdomTree US Dividend Index that have the best combined ranking of the growth and quality factors mentioned above. The index is dividend-weighted on an annual basis so that it proportionately reflects each company’s aggregate cash dividend stocks, with the highest-dividend-paying companies being the most weighted.

Index securities are capped at 5% individually, and most sectors cannot represent more than 20% – information technology is an exception to a 25% limit, while real estate is l other at a ceiling of 10%.

DGRW has an expense ratio of 0.28%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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