While the current stock market correction has brought most sectors down, at least one has held up better than the rest. The telecom sector has experienced less of a decline than the overall market over the past four weeks.
Telecom stocks have failed to keep pace with the overall market in the second half of 2009. Since June 30, the iShares Dow Jones U.S. Telecom Sector Index Fund (IYZ) is only up 3% compared to an 18% gain for the SPDR S&P 500 (SPY).
Last week’s market correction has lowered stock prices to the point where dividend yields are now at their highest levels in 12 years. Leading S&P 500 components such as Pfizer (PFE), AT&T (T), Dow Chemical (DOW), Nucor (NUE), and Duke Energy (DUK) all ended the week with forward looking dividend yields of over 6.5% and well above their 5 year averages.
There are multiple ways to invest in telecommunications with ETFs that vary by degree of sector focus and geographic diversity.
Telecom was the strongest performing sector last week as the stocks continue to make a come back from their March lows. The iShares Dow Jones U.S. Telecommunications Sector Index Fund IYZ is one of the leading telecom sector ETFs.