Telecom ETF

AAA

DEFINITION of 'Telecom ETF'

An exchange-traded fund that invests in companies with a significant stake in telephone and internet products, services and technologies. There are many different flavors of telecom ETFs, each of which focuses on a different aspect of the telecommunications industry. International telecom ETFs invest in top telecommunications companies from countries around the world. Telecom services ETFs invest in companies that provide phone and internet service. Other telecom ETFs do not focus on a single aspect of the telecommunications sector but track the sector as a whole.

Also know as "communications industry ETF".

INVESTOPEDIA EXPLAINS 'Telecom ETF'

In one respect, telecom ETFs do not offer investors much in the way of diversification and risk mitigation because they are concentrated on a single industry; on the other hand, they do offer diversification and risk mitigation because they allow investors to invest in a basket of telecommunications companies. As a result, telecom ETFs can be less risky than buying a single company's stock.

RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. ISP (Internet Service Provider)

    A company that provides consumers, businesses, and other Internet ...
  3. Communication Industry ETF

    An exchange-traded fund that invests in telecommunications companies ...
  4. Broadband

    A high-speed, high-capacity transmission medium that can carry ...
  5. Federal Communications Commission ...

    An independent U.S. government regulatory agency responsible ...
  6. Asymmetric Digital Subscriber Line ...

    A new technology that provides high transmission speeds for video ...
RELATED FAQS
  1. What countries represent the largest portion of the global telecommunications sector?

    The United States, United Kingdom, Japan and China represent the largest portions of the global telecommunications sector. ... Read Full Answer >>
  2. What is the telecommunications sector?

    The telecommunications sector comprises companies that make communication possible on a global scale whether through the ... Read Full Answer >>
  3. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  4. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  5. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  6. Is there a situation in which wash trading is legal?

    Wash trading, the intentional practice of manipulating a stock's activity level to deceive other investors, is not a legal ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    4 Ways To Use ETFs In Your Portfolio

    To take full advantage of these vehicles, you need to know how they can fulfill certain strategies.
  2. Personal Finance

    How To Pick The Best Telecom Stocks

    This ever-changing industry can leave investors scratching their heads. Find out which metrics matter.
  3. Mutual Funds & ETFs

    Introduction To Exchange-Traded Funds

    Get into ETFs and enjoy the benefits of a mutual fund with the flexibility of a stock.
  4. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI EAFE Index

    Discover how the iShares MSCI EAFE Index ETF is managed, and learn which investors may benefit from adding the fund to a portfolio.
  5. Mutual Funds & ETFs

    ETF Analysis: Powershares DB US Dollar Bullish Fund

    Explore information and detailed analysis of two popular currency exchange-traded funds, the PowerShares DB U.S. Dollar Bullish and Bearish Index Funds.
  6. Mutual Funds & ETFs

    ETF Analysis: Market Vectors Gold Miners

    Learn about Market Vectors Gold Miners, one of the most volatile ETFs in the market, which fell 75% from 2011 to 2015 after climbing 300% from 2008 to 2011.
  7. Mutual Funds & ETFs

    The 5 Biggest ETF Companies

    Review a list of the five largest and most influential ETF providers in the world: BlackRock, Vanguard, State Street, Deutsche Bank AWM and Invesco.
  8. Investing

    Advising FAs: Explaining ETFs to a Client

    Exchange traded funds (ETFs) have exploded in popularity with both investors and professionals for several reasons, and their growth shows no sign of slowing.
  9. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in Agriculture

    Learn about some the best available exchange-traded funds for profiting from exposure to the agricultural sector through stocks and futures.
  10. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in the Russell 200 Index

    Learn about three ETFs that track the Russell Top 200 Index and how these ETFs have a very high correlation with the S&P 500 index.

You May Also Like

Hot Definitions
  1. Dog And Pony Show

    A colloquial term that generally refers to a presentation or seminar to market new products or services to potential buyers.
  2. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  3. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  4. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  5. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  6. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!