ETF Research and Analysis

by Robert Goldsborough
Suitability
IShares Global Telecom ETF IXP offers exposure to a portfolio of global telecommunications companies. Given this exchange-traded fund's narrow focus, investors should treat IXP as a tactical tool for the satellite portion   Read more 

Bull Case

Many of the large holdings in this fund have the cash-generating ability to meet their near-term obligations and maintain dividend payments.
This ETF has had lower historical volatility than U.S.-only telecom ETFs. Read more 

Bear Case

Growth in data services generally has been sufficient to replace most lost phone revenue recently, but the Internet-access business is starting to mature while the pressure on the land-line phone business continues largely unabated. This has affected profitability, particularly for large carriers with big networks such as Verizon.
During the past few years, cable companies have provided the primary form of fixed-line competition for phone companies, for both phone and Internet-access customers.
In the U.S., the FCC appears to be unwilling to allow any further consolidation among telecom firms, which could prevent smaller players' ability to merge with one another to create better scale to compete against AT&T and Verizon. Even so, more deal activity in the space should come from foreign firms buying U.S. telecoms or nontelecom firms acquiring telecoms. Read more 

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