Markets
T

6 Telecom ETFs to Dial Into Verizon, AT&T, Vodafone

A generic image of coins in front of a stock chart.
Credit: Shutterstock photo

Telecommunications exchange traded funds have enjoyed a strong run this year as income-oriented investors turned to the the attractive dividend-paying sector.

The U.S. telecom industry is changing. Consumers are exchanging traditional land lines for cellphones. Cable providers are muscling in on the telecom space, expanding internet access and phone coverage.

Related: 46 Tech ETFs to Tap Into Big Growth Names

"More cable consolidation is occurring," writes Morningstar analyst Robert Goldsborough. "And big cable companies are boosting network quality and trying to take market share from telecom rivals in the less attractive residential fixed-line portion of the market."

Nevertheless, Goldsborough argues that fixed-line telecom service remains a stable revenue source for now.

Trending on ETF Trends

Bears Singe Solar ETF - First Solar, Solar City

Philippines ETF Rallies on Duterte Presidential Win

ETF TMI: 2 Themed ETFs Launch; Energy, MLPs Active

Dividend ETFs That Bark Pfizer, Johnson & Johnson, AT&T

Bears Look to Feast on These 8 Energy ETFs

Looking ahead, growth may come through greater consolidation. For instance, AT&T ( T ) has been acquiring stakes in satellite TV while Verizon ( VZ ) has expanded into mobile advertising platforms.

Currently, in a uneven market where raw materials-related sectors are underperforming in a depressed commodities environment, the telecom space has stood out as a positive driver of market earnings. Telecom services are seen as one of the few ares of positive earnings growth.

Related: The Rise of Themed ETFs: Video Games, Drones, Millennials

Moreover, the industry has offered attractive dividend yields, which has helped attract value investors in a year where many are shunning the growth category. For instance, the Vanguard Telecommunication Services ETF (NYSEArca: VOX ), the largest telecom-related ETF, comes with a 3.76% 12-month yield and rose 9.9% year-to-date, whereas the broader S&P 500 gained 1.4% so far this year.

Investors who are interested in tracking the telecommunications services sector have a handful of related ETF options to choose from.

Telecom ETFs:

1. Vanguard Telecommunication Services ETF (NYSEArca: VOX )

Top 10 Holdings - 69.65% of Total Assets:

Verizon Communications Inc. Com VZ 22.42
AT&T Inc. T 22.37
CenturyLink, Inc. Common Stock CTL 4.58
Level 3 Communications, Inc. Co LVLT 4.36
SBA Communications Corporation SBAC 3.72
T-Mobile US, Inc. TMUS 3.50
Frontier Communications Corpora FTR 2.63
Telephone and Data Systems, Inc TDS 2.11
Sprint Corporation Common Stock S 2.04
ORBCOMM Inc. ORBC 1.92

2. iShares U.S. Telecommunications ETF (NYSEArca: IYZ )

Top 10 Holdings - 59.94% of Total Assets:

AT&T Inc. T 10.67
Verizon Communications Inc. Com VZ 9.95
SBA Communications Corporation SBAC 5.87
Level 3 Communications, Inc. Co LVLT 5.67
CenturyLink, Inc. Common Stock CTL 5.62
T-Mobile US, Inc. TMUS 5.27
Frontier Communications Corpora FTR 4.84
Ruckus Wireless, Inc. Common St RKUS 4.10
Telephone and Data Systems, Inc TDS 4.02
Shenandoah Telecommunications C SHEN 3.53

3. iShares Global Telecomm ETF (NYSEArca: IXP )

Top 10 Holdings - 71.22% of Total Assets:

AT&T Inc. T 18.40
Verizon Communications Inc. Com VZ 15.99
Vodafone Group PLC VODPF.L 6.56
CHINA MOBILE HONG KO CHLKF 4.88
NIPPON TEL & TEL CP NPPXF 4.48
BT Group PLC BTGOF.L 4.39
Deutsche Telekom AG DTEGF.DE 4.29
KDDI CORP KDDIF 4.24
SOFTBANK CORP ORD SFTBF 4.14
Telstra Corp Ltd TTRAF.AX 3.85

4. Fidelity MSCI Telecommunication Services Index ETF (NYSEArca: FCOM )

Top 10 Holdings - 67.9% of Total Assets:

AT&T Inc. T 22.00
Verizon Communications Inc. Com VZ 20.95
CenturyLink, Inc. Common Stock CTL 4.41
Level 3 Communications, Inc. Co LVLT 4.23
SBA Communications Corporation SBAC 3.69
T-Mobile US, Inc. TMUS 3.37
Straight Path Communications In STRP 2.61
Frontier Communications Corpora FTR 2.49
Globalstar, Inc. Common Stock GSAT 2.13
pdvWireless, Inc. PDVW 2.02

5. SPDR S&P International Telecommunications Sector ETF (NYSEArca: IST )

Top 10 Holdings - 59.4% of Total Assets:

Vodafone Group PLC VODPF.L 9.92
Deutsche Telekom AG DTEGF.DE 6.37
BT Group PLC BTGOF.L 6.30
KDDI CORP KDDIF 6.27
SOFTBANK CORP ORD SFTBF 6.22
Telefonica SA TEFOF.BC 5.76
NIPPON TEL & TEL CP NPPXF 4.95
NTT DOCOMO INC ORD NTDMF 4.92
Orange SA FNCTF.PA 4.52
Singapore Telecommunications Ltd SNGNF.SI 4.17

6. SPDR S&P Telecom ETF (NYSEArca: XTL )

Top 10 Holdings - 24.46% of Total Assets:

CommScope Holding Company, Inc. COMM 2.56
NetScout Systems, Inc. NTCT 2.49
Ubiquiti Networks, Inc. UBNT 2.48
SBA Communications Corporation SBAC 2.47
Ruckus Wireless, Inc. Common St RKUS 2.44
InterDigital, Inc. IDCC 2.44
Arista Networks, Inc. Common St ANET 2.40
NETGEAR, Inc. NTGR 2.40
Telephone and Data Systems, Inc TDS 2.39
Windstream Holdings, Inc. WIN 2.39

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

This article was provided by our partner Tom Lydon of etftrends.com.


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

In This Story

T VZ

Other Topics

ETFs