The telecom sector didn’t fare quite too well during the financial collapse, but it did see tremendous gains this year as the smartphone industry ramped up their sales pitch. Telecom exchange traded funds (ETFs) may see a flurry of activity as the telecom industry sees some new additions.
Competition is heating up and smartphone companies are teaming up to help increase their profits, writes Jared Cummans for Seeking Alpha. AT&T (NYSE: T) has teamed up with the BlackBerry Torch, and Verizon (NYSE: VZ) recently confirmed that it will start issuing iPhones in 2011.
Microsoft (NASDAQ: MSFT) also announced it will role out a line of phones from HTC and Samsung. Research In Motion (NASDAQ: RIMM) stated that it will produce a playbook table that will compete with the iPad. [Telecom and Tech ETFs Work As a Team.]
- Vanguard Telecommunication Services ETF (NYSEArca: VOX) and iShares Dow Jones U.S. Telecommunications Sector ETF (NYSEArca:IYZ) are heavily weighted toward their top 10 holdings, which helped boost their performance as some big-ticket smartphone items came onto the market earlier this year.
- Invesco PowerShares Dynamic Telecommunications & Wireless Portfolio ETF (NYSEArca: PTE) weights its holdings based on fundamental financial ratios in an attempt to beat the major indexes.
- WisdomTree International Communications (NYSEArca: DGG) focuses on dividend-paying telecom companies.
- The iShares S&P Global Telecommunications Sector ETF (NYSEArca: IXP) and SPDR S&P International Telecommunications Sector ETF (NYSEArca: IST) are mostly based off companies in the developed economies, and the lower returns also reflect the higher degree of regulation in the foreign markets. [International Telecom ETFs: A Better Bet?]
- Leveraged plays include the ProShares Ultra Telecommunications ETF (NYSEArca: LTL), which gives double daily long exposure, and the ProShares UltraShort Telecommunications ETF (NYSEArca: TLL), which provides double daily short exposure.
For more information on the telecom sector, visit our telecommunications category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.