Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect the telecom industry to keep growing as our planet's population grows and our demand for communication products and services grow, the iShares Dow Jones U.S. Telecom ETF
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF's expense ratio -- its annual fee -- is a relatively low 0.47%.
This ETF has performed rather well, beating the world market over the past three years (though lagging it over the past five). As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
With a low turnover rate of 25%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
Some telecom companies had strong performances over the past year. CenturyLink
Other companies didn't do as well last year, but could see their fortunes change in the coming years. Frontier Communications
Fellow landline and rural specialist Windstream
Then there's Level 3 Communications
The big picture
Demand for telecom services and products isn't going away anytime soon. A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.
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