Exchange Traded Funds (ETFs)

Reaching Out and Communicating With This ETF

As you know, I am a fervent supporter of effective communication and the power that such a skill can bring to bear in almost every aspect of our daily lives.

Indeed, I strongly believe that effective communication skills are a potent antidote to the political polarization that is currently endemic in America. If you want to know more about this problem, as well as how you can make effective communication one of your New Year’s declarations, my friend and colleague Heather Wagenhals recently wrote a column in my The Deep Woods newsletter about this very topic.

The telecommunications sector, however, did not do well in 2022. According to MarketWatch.com, telecommunications was the worst-performing sector of the S&P 500 last year.

Indeed, some companies in the sector, including Meta (NASDAQ: META) and WarnerBros Discovery (NASDAQ:WBD) had the “worst year on record.” For instance, according to MarketWatch, the SPDR Communication Services Select Sector Exchange-Traded Fund (NYSEARCA: XLC), which tracks the communications sector of the S&P 500, dropped by 39% in 2022, while the S&P 500 itself fell by 20.2% over the same time.

However, that does not mean that we should flee telecommunications and never look back. After all, our need, as humans, to communicate is still as prevalent as ever, and the sector continues to grow. One way to generate returns from telecommunication stocks is through the exchange-traded fund (ETF) Vanguard Communication Services Index Fund ETF (NYSEARCA: VOX).

VOX is an ETF that tracks the performance of the NASDAQ OMX U.S. Telecommunication Services Index, which consists of companies in the telecommunications sector. This includes both traditional telecommunications companies, as well as certain types of media and internet services companies.

Some of the firms in VOX’s portfolio include Alphabet Inc. Class A (NASDAQ: GOOGL), Alphabet Inc. Class C (NASDAQ: GOOG), Facebook Inc. Class A (NASDAQ: META), Walt Disney Co. (NYSE: DIS), Verizon (NYSE: VZ), AT&T (NYSE: T) and T-Mobile (NASDAQ: TMUS).

As of Jan. 3, VOX has been down 6.66% over the past month and 1.62% for the past three months. It is currently up 1.13% year to date.

Chart courtesy of www.stockcharts.com

The fund has amassed $2.34 billion in assets under management and has an expense ratio of 0.10%.

Overall, the VOX ETF may be a good choice for investors looking for exposure to the telecommunications sector, but it is important to carefully consider the risks and potential returns before making any investment decisions.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.