Designed to provide broad exposure to the Technology - Telecom segment of the U.S. equity market, the iShares Global Telecom ETF (IXP - Free Report) is a passively managed exchange traded fund launched on 11/12/2001.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Telecom is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
The fund is sponsored by Blackrock. It has amassed assets over $389.69 M, making it one of the larger ETFs attempting to match the performance of the Technology - Telecom segment of the U.S. equity market. IXP seeks to match the performance of the S&P Global 1200 Telecommunications Services Sector Index before fees and expenses.
The S&P Global 1200 Telecommunications Services Sector Index measures the performance of companies are part of the telecommunications sector of the economy and are important to global markets.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.48%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.68%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Verizon Communications Inc (VZ - Free Report) accounts for about 17% of total assets, followed by At&t Inc (T - Free Report) and Vodafone Group Plc (VOD - Free Report) .
The top 10 holdings account for about 71.96% of total assets under management.
Performance and Risk
The ETF has lost about -7.37% and is down about -3.71% so far this year and in the past one year (as of 05/24/2018), respectively. IXP has traded between $55.80 and $62.51 during this last 52-week period.
The ETF has a beta of 0.65 and standard deviation of 13.12% for the trailing three-year period, making it a medium risk choice in the space. With about 43 holdings, it has more concentrated exposure than peers.
IShares Global Telecom ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. IXP, then, is not a great choice for investors seeking exposure to the Telecommunication ETFs segment of the market. Instead, there are better ETFs in the space to consider.
IShares U.S. Telecommunications ETF (IYZ - Free Report) tracks Dow Jones U.S. Select Telecommunications Index and the Vanguard Telecommunication Services ETF (VOX - Free Report) tracks MSCI US Investable Market Telecommunication Services 25/50 Index. IShares U.S. Telecommunications ETF has $308.83 M in assets, Vanguard Telecommunication Services ETF has $1.02 B. IYZ has an expense ratio of 0.44% and VOX charges 0.10%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.