Friday, January 18, 2013

5-Star ETFs Poised to Pop: iShares S&P Global Telecom

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the iShares S&P Global Telecommunications Sector Index Fund (NYSE: IXP  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at iShares S&P Global Telecom and see what CAPS investors are saying about the ETF right now.

iShares S&P Global Telecom facts

Inception November 2001
Total Assets $439.4 million
Investment Approach Seeks investment results that correspond to the S&P Global 1200 Telecommunications Sector Index, which includes diversified communication carriers and wireless communications companies.
Expense Ratio 0.48%
1-Year / 3-Year / 5-Year Annual Returns 1.9% / 9.7% / 2.1%
Top Holdings with High CAPS Interest (at least 1,000 Active Picks) and Portfolio Weight AT&T (NYSE: T  ) (15.4%)
Vodafone Group (Nasdaq: VOD  ) (12.2%)
Verizon Communications (NYSE: VZ  ) (9.6%)
Dividend Yield 4.8%
Alternatives iShares Dow Jones U.S. Telecom (NYSE: IYZ  )
Vanguard Telecom Services (NYSE: VOX  )

Sources: Morningstar and Motley Fool CAPS.

On CAPS, 98% of the 93 members who have rated iShares S&P Global Telecom believe the ETF will outperform the S&P 500 going forward. These bulls include All-Star Calegro and Geofiz.

Having gotten on board a few years ago, Calegro touched on the ever-increasing importance of the telecom sector:

It has all my favorite stocks all in one basket ... OK I'm biased toward Telecommunication stocks. Try NOT taking your mobile with you for the next 2 days; or remember the time when you can't get a signal and you vaguely feel like you'd just lost your two front teeth. Get it?!

iShares S&P Global Telecom, in particular, sports an annual turnover ratio of just 6%. That's lower than that of other telecom ETFs like iShares Dow Jones U.S. Telecom (29%) and Vanguard Telecom Services (21%).

CAPS member Geofiz expands on the outperform argument:

[iShares S&P Global Telecom] is a great way to play telecom growth in emerging markets, while tempering the inevitable dips and peaks in such investments with established stabilizing influences (AT&T and Vodaphone). ... [E]xpense ratio is low at 0.48%. I own the stock in my IRA, reinvesting dividends while sheltering same from taxes.

What do you think about iShares S&P Global Telecom, or any other ETF for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional ETFs is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

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