While AT&T and Verizon, the largest holdings in IYZ and VOX, have remained durable in recent weeks, the ETFs have been hampered by deterioration in smaller telecom names. For example, shares of Windstream Holdings (NasdaqGS: WIN) have plunged 8% in the past month while shares of Frontier Communications (NYSE: FTR) are lower by 6.3%. Those stocks, which combined for nearly 9% of IYZ, served as catalysts for rallies in telecom ETFs earlier this year. [Defensive Telecom ETFs]
Unfortunately, Frontier and Windstream are not the only telecom offenders. T-Mobile (NYSE: TMUS), the unit of Germany’s Deutsche Telekom (OTC: DTEGY), is lower by nearly 9% over the past month while former suitor Sprint (NYSE: S) has shed 5%.Those stocks also combine for nearly 9% of IYZ’s weight.
Despite the weakness in telecom stocks and ETFs, investors have remained committed to the thesis that sector is a solid defensive destination. Since the start of the third quarter, VOX has added $52.3 million in new assets while almost $13 million in new capital has flowed into IYZ.
iShares U.S. Telecommunications ETF
