It’s one of the rare bipartisan issues, and while Democrats and Republicans have different motivations, both parties have big tech in their cross-hairs. The same is true of European regulators, which are actively pressuring the likes of Amazon, Apple, Facebook, and Google. “The House Judiciary Subcommittee’s recent 450-page anti-trust report was a wake-up call to the Silicon Valley giants: the prospect of break-up is no longer remote,” writes Jeff Weniger , WisdomTree director of asset allocation. “The document even makes comparisons to the railroad and oil barons of the 1800s.
Okay, point taken. The GOP has bones to pick too, arguing that social media’s censorship crosses over into the realm of publishing, theoretically opening the door to libel suits. You may have heard chatter about Section 230 of the 1996 Communications Decency Act, which some politicians are reviewing to see if it can be used to reign in the big social media players.”
What comes of the political pressure from both sides of the Atlantic remains to be seen, but it is an issue for investors to consider given the out-sized presence of big tech in many standard domestic equity benchmarks.
Investors looking to tap tech while mitigating some of the aforementioned political risk have options to consider, including the WisdomTree U.S. Quality Dividend Growth Fund (DGRW A-).
DGRW seeks to track the price and yield performance of the WisdomTree U.S. Quality Dividend Growth Index. The index is a fundamentally weighted index that consists of dividend-paying U.S. common stocks with growth characteristics.
Including exposure to Apple, DGRW’s technology weight is higher than that of old guard dividend exchanges. Yet, Amazon, Facebook, and Google aren’t in DGRW because those aren’t dividend-paying names.
“Apple wants to sever incestuous ties with Google and make the leap into search, too,” notes Weniger. “That means three mom & pop shops in that business: Google, Microsoft and Apple. Who knows? Maybe one day there will be a half dozen players in the industry. After all, the EU is deemphasizing monetary penalties and playing up lending a hand to competitors.”
Another avenue for maintaining quality exposure while avoiding some potential tech pitfalls is via the the WisdomTree Global Dividend Model Portfolio.
“This model portfolio seeks to provide capital appreciation and high current dividend income, through a globally diversified set of WisdomTree’s dividend income oriented equity ETFs. The model strives to deliver dividend income in excess of the global benchmark of equities,” according to the issuer.
For more on how to implement model portfolios, visit our Model Portfolio Channel.