3 High Yielding Telecommunications ETFs (IST, AXTE, IXP)
Carolyn Pairitz: There are not many choices for ETFs focused purely on the telecom sector; more often than not telecom is grouped in with infrastructure or utilities ETFs. Even though there are many overlaps in sector-specific funds, “pure” telecom ETFs can be a valuable asset for investors looking to fine tune their exposure. Much like utilities, telecom is known for consistent and above average dividends, making this asset class quite appealing in the current low-rate environment. The top three dividend yielding ETFs in telecom all have a broad market view, offering both growth and stability through the exchange-traded product wrapper [see also Inside The Peritus High Yield ETF].
1. SPDR S&P International Telecommunications Sector ETF (NYSEARCA:IST)
Bringing about the highest current 30-day SEC yield is no easy task, and with a distribution of around 5.56%, IST has consistently delivered over the last four years. The index, to its success, captures the full universe of institutionally investable stocks, focusing on giant cap companies, which make up 60% of the portfolio. While the underlying benchmark does exclude emerging markets on principle, there are not many giant cap corporations in them, leaving the largest country representations in the United Kingdom, Japan, Spain and France [see also 3 Tech ETFs with 20% Holdings in Apple (and 3 with less than 2%)].
2. MSCI ACWI ex US Telecommunication Services Sector Index Fund (NYSEARCA:AXTE)
Investors looking to diversify away from the United States while still looking for current income might consider the dividend yield of 5.56% reason enough to invest in AXTE. This ETF has a tilt towards wireless communication stocks and the majority of its holdings are in the United Kingdom, Japan, Spain and other developed markets; AXTE also has its hand in emerging markets like China and Mexico for added growth potential [see also ETFs Ripe For Contrarian Investors].
3. S&P Global Telecommunications Sector Index Fund (NYSEARCA:IXP)
The first on this list to leave a third of its funds in the United States, this ETF measures the performance of the global telecom market, including diversified carriers and wireless companies. If the 4.53% 30-day SEC yield isn’t inciting enough, the fund’s impressive YTD return of 9% should peak the interest of many income-hungry investors. Besides the United States, the 50 holdings that make up IXP include securities from the United Kingdom, Japan, Canada and emerging markets like Mexico and China [for more ETF analysis, make sure to sign up for our free ETF newsletter or try a free seven day trial to ETFdb Pro].
Written By Carolyn Pairitz From ETF Database Disclosure: No Positions
ETF Database is committed to giving our audience, consisting of both active traders and buy-and-hold investors, information that, to our knowledge, is truthful and non-biased. [For more ETF insights, sign up for our free ETF newsletter or try a free seven day trial of ETFdb Pro .]