The world of dividend stocks has traditionally been dominated by companies in the utility, financial and consumer goods spaces. These stalwart sectors are known to offer strong and consistent cash flow models that bode well for returning value to shareholders through quarterly dividends.

However, a new theme is emerging in the dividend world that is combining promising growth potential with cash-rich balance sheets. Large- and mid-cap tech stocks have been increasingly turning their profits toward share buybacks and income streams with the intent of enticing fresh capital to their stock.

Companies such as Apple (AAPL) and Microsoft (MSFT) have undergone a transformation from growth-oriented powerhouses to value-added income names. While picking a few well-known dividend stocks within the technology sector is one way to play this theme, several ETFs offer exposure to this opportunity as well.

The First Trust Nasdaq Technology Dividend Index Fund (TDIV) is a specialized ETF that focuses exclusively on technology and telecommunication companies that have paid a dividend in the past 12 months. Both AAPL and MSFT are in the top five holdings of TDIV, which calculates the weightings of the underlying stocks based on a modified dividend weighting methodology that puts more importance into yield and sector makeup rather than market cap.

TDIV currently has more than $700 million in total assets spread among a diverse group of nearly 100 dividend stocks in the tech space. The 30-day SEC yield of this ETF is currently listed at 2.66% and income is paid quarterly to shareholders. In addition, the expense ratio of TDIV is listed at a modest 0.5% annually, or $50 for every $10,000 invested.

This ETF can potentially be used within the context of a diversified income portfolio as a tactical allocation that over weights the large-cap technology sector. Many of the underlying companies in TDIV are stable, global growth stories that have continued to offer strong momentum as well.

Click to Enlarge So far this year, TDIV has gained 10% in total return and has been closely mirroring the strength of the sector benchmark Technology SPDR (XLK). In addition, TDIV offers a dividend yield 50% higher than the current 1.72% yield on XLK.

Interestingly enough, many broad-based dividend ETFs are also starting to include larger allocations to tech stocks as well.

The Vanguard High Dividend Yield ETF (VYM) tracks nearly 400 dividend stocks across all sectors that has its largest allocation to the technology sector at 17.6%. In addition to significant exposure to AAPL and MSFT, VYM also has benefited from the strength in Intel (INTC) and Cisco Systems (CSCO).

VYM currently has more than $9 billion in total assets and offers a current 30-day SEC yield of 2.98%. In addition, this ETF charges an ultra-low 0.1% expense ratio that makes it an attractive proposition for fee-conscious investors.

Those seeking to increase portfolio yield while still eying capital appreciation might find that both TDIV and VYM fit the bill. Furthermore, the changing landscape of interest rates might further increase the value of these tech stocks as they are less sensitive to fluctuations in bond yields than alternative sectors such as utilities.

Ultimately, these dividend funds add another tool in your income arsenal to successfully navigate the markets’ fickle machinations.

David Fabian is Managing Partner and Chief Operations Officer of FMD Capital Management. As of this writing, he was long TDIV and VYM. Learn More: Why I love ETFs, And You Should Too.