ETF ANALYSIS ISHARES US TELECOMMUNICATIONS ~ forex trading jobs nyc
Issued in May 2000, the iShares U.S. Telecommunications ETF (NYSEARCA: IYZ) provides exposure to the U.S. telecommunications sector. IYZ invests its assets in companies that provide telephone- and Internet-related products, services and technologies. As of Aug. 27, 2015, IYZ has 24 holdings and total net assets of $447.41 million. It has generated an annualized market price return of -1.75%.
To provide specialized exposure to telecommunication stocks, IYZ tracks the Dow Jones U.S. Select Telecommunications Index; this index may include small-, mid- or large-cap companies. IYZ employs a representative sampling indexing strategy to achieve its investment objective. This strategy does not require IYZ to purchase all securities comprising its underlying index. Rather, IYZ may purchase a sample of securities and depositary receipts that collectively has similar characteristics to the underlying index. Under normal market conditions, IYZ invests at least 90% of its total net assets in securities comprising its benchmark index. The remaining portion of its net assets may be invested in derivative contracts, cash and cash equivalents.
As of Aug. 27, 2015, IYZ invests 47.88% of its portfolio in the integrated telecommunications sector, 30.63% in the wireless telecommunications sector, 18.38% in the alternative carriers sector, 3.05% in the communications equipment sector, and 0.05% in cash and derivatives. IYZ’s top holdings include telecommunications giants AT&T and Verizon, which amount to 22.52% of its portfolio. The fund is heavily weighted toward its top 10 holdings, which account for 62.70% of its portfolio.
CHARACTERISTICS
IYZ is managed by BlackRock Fund Advisors and charges a competitive expense ratio of 0.45%, in comparison to the average expense ratio of its category of communications ETFs. Since IYZ implements a passive investment strategy, it has a moderate turnover ratio of 49% as of April 30, 2015. The fund tracks the Dow Jones U.S. Select Telecommunications Index with a tracking error of 0.61, which can be attributed to the transaction costs and sampling methodology. IYZ may lend securities with an equivalent value, including the value of any collateral received, to a maximum of one-third of the fund’s total net assets. IYZ’s relatively low tracking error can be attributed to securities lending.
SUITABILITY AND RECOMMENDATIONS
As with any investment, the iShares U.S. Telecommunications ETF carries risks. Since IYZ provides specialized exposure to U.S. telecommunications companies, the fund carries a high degree of sector risk. Additionally, IYZ is exposed to equity risk, market risk, nondiversification risk, country risk and small-cap companies risk.
As of July 31, 2015, based on trailing three-year data, IYZ has a standard deviation of 12.97%; an annualized market price return of 9.67%; an equity beta, against the S&P 500 Index, of 0.87; a Sharpe ratio of 0.77; and an alpha, against the Morningstar SEC/Communication Svc TR USD Index, of -5.71. IYZ has a high price-to-earnings (P/E) ratio of 27.31, a price-to-book (P/B) ratio of 1.86 and a dividend yield of 2.68%.
Based on modern portfolio theory (MPT), IYZ’s beta indicates it is theoretically less volatile than, and has a high degree of correlation to, the S&P 500 Index. The fund’s Sharpe ratio indicates it provided adequate returns on a risk-adjusted basis. Its alpha, against its best-fit index, indicates it underperformed the Morningstar SEC/Communication Svc TR USD Index by an annualized 5.71% on a risk-adjusted basis. IYZ is tilted toward small- and mid-cap companies; this indicates the fund may carry more risk.
IYZ is best-suited for long-term growth investors with a moderate degree of risk tolerance seeking exposure to a nondiversified portfolio of common stocks of U.S. telecommunications companies. IYZ is also suitable for investors who seek income from dividend payments, while being invested in the telecommunications sector. The fund’s specialized exposure to this sector is not suitable as a core holding. Rather, IYZ should be purchased as a satellite holding in a well-diversified portfolio of stocks and/or fixed-income securities.
ETF’s – Built-in Diversification and Flexibility
Exchange-traded funds (ETFs) are an easy, low cost way to help provide diversification and flexibility to anyone’s portfolio. E*TRADE lets you trade every ETF sold, and provides over 100 commission-free ETFs from leading independent providers. Manage your ETF portfolio yourself, or let the professionals at E*TRADE Capital Management do it for you for instant diversification and flexibility.
Exchange-traded funds (ETFs) are an easy, low cost way to help provide diversification and flexibility to anyone’s portfolio. E*TRADE lets you trade every ETF sold, and provides over 100 commission-free ETFs from leading independent providers. Manage your ETF portfolio yourself, or let the professionals at E*TRADE Capital Management do it for you for instant diversification and flexibility.
More info for ETF ANALYSIS ISHARES US TELECOMMUNICATIONS ~ forex trading jobs nyc:
0 komentar:
Posting Komentar