ETF Research and Analysis

by Robert Goldsborough
Suitability
Investors seeking relatively concentrated exposure to the U.S. telecom industry can consider Vanguard Telecommunication Services ETF VOX, which is the largest U.S. telecom exchange-traded fund, as a tactical investment   Read more 

Bull Case

In our view, some of the best-in-class telecom firms offer above-average dividend yields and have the capital and cash-generating ability to meet their near-term obligations and maintain dividend payments.
Major carriers have made good progress navigating the transition from voice to data thus far.
This ETF's expense ratio is much lower than a competing iShares ETF. Read more 

Bear Case

The ETF is extremely focused on its top holdings, particularly AT&T and Verizon. Those two stocks largely determine the valuation and risk profile of this portfolio.
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 has continued 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. Read more 

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Broad Fixed-Income Exposure At a Low Cost 
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