Best Communication Services ETFs Right Now

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Contributor, Benzinga
Updated: April 17, 2020

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There are more than 3 billion active smartphone users today. Smartphones have made life faster and more convenient than ever before. Tasks such as ordering food, paying your bills or simply talking to a friend are instantaneous, thanks to communication services.

This worldwide boom in information technology has piqued the interest of investors, and it’s not too late for you to capitalize on the communication services sector. Communication services ETFs with underlying assets in companies that provide fixed-line service and mobile phone carriers and manufacturers hold tremendous potential for growing your wealth.  

Communication Services ETFs Biggest Gainers and Losers

Here’s a quick look at communication services ETFs on the market with the best profits and worst losses. 

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Premarket Communication Services ETFs

Here’s a quick look at the premarket positions of communication services ETFs to help you predict their price movements during trading sessions. 

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Aftermarket Communication Services ETFs

Here’s a quick look at the positions of communication services ETFs after major stock exchanges are closed for trading.  

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Why Invest in Communication Services ETFs?

Here are the top 3 reasons for you to invest in communication services ETFs: 

1. Communication services are at the cusp of innovation. 

The communication services industry is always on the verge of breakthrough technologies that can transform lives. Year after year, mobile manufacturers release flagship phones that make people crave for upgrades. Folding smartphones, full-glass panel bodies and wireless chargers are some of the latest offerings in 2020. 

The internet has a massive hand behind the smartphone explosion. Mobile carriers are all set to launch 5G wireless networks across cities to boost data consumption for the masses. These exciting technologies have been a consistent source of growth for communication service companies, making investors reach for a piece of the pie.

2. Rapidly growing mobile companies are on the rise. 

The cost of manufacturing a smartphone has significantly decreased. This has prompted numerous mobile companies to start up overnight and make their imprint on the market. New players in the mobile industry are coming out with cell phone models with unbelievable specs at unbeatable prices. Investors with a keen eye in the tech space can grab ETFs that offer subsidized rates for stocks in these promising companies.

On the other hand, if particular mobile startups fail to live up to their expectations, the diversity of communication services ETFs can offset the risk of losing all your money on a single investment.   

3. Wireless technologies are the future. 

Investing in traditional landline service providers is redundant. Communication service companies are tirelessly working toward developing Wi-Fi modems and receptors to support the wireless ecosystem that people have grown to love. 

In less than 2 decades, rotating phone dials and yellow pages were replaced with portable phones that can fit all your contacts in 1 device. The next leap is undoubtedly going to be smartphones that deliver your needs at the tap of a screen. Communication service ETFs can give you a head start to invest in the future.   

Communication Services ETFs by AUM

The sheer scope of companies pooled into communication services ETFs is large enough to cast your investment net far and wide. Landline service providers, mobile carriers, cell phone manufacturers, media houses, social media networks and cable providers are included in the mix. ETFs from the communication services sector let you purchase shares in a bunch of these companies at affordable costs. 

Evaluate certain key factors such as expense ratios, historical performance, liquidity and the total AUM before you invest in ETFs. Based on these criteria, Benzinga recommends the following ETFs to invest in the communication services sector.

1. SPDR S&P Telecom ETF (NASDAQ: XTL)

SPDR S&P Telecom ETF has been on the market since January 2011. It tracks the S&P Telecom Select Industry Index and offers broad-based exposure to the U.S. telecom industry. As of April 6, 2020, it had an opening rate of $61.98 with a change rate of 0.32%. It has a low expense ratio of 0.35% with a total AUM of $41.6 million. SPDR S&P Telecom ETF has low liquidity with an average daily trade volume of 9,173 shares.

Historical performance of SPDR S&P Telecom ETF over the last 5 years. Source - NASDAQ

2. Fidelity MSCI Communication Services Index ETF (NASDAQ: FCOM)

Fidelity MSCI Communication Services Index ETF has been on the market since October 2013. It tracks the MSCI USA IMI Telecommunication Services 25/50 Index and offers exposure to the communication services sector in the U.S. equity market. As of April 6, 2020, it had an opening rate of $29.64 with a change rate of 0.85%. It has a low expense ratio of 0.08% with a total AUM of $391.4 million. Fidelity MSCI Communication Services Index ETF has high liquidity with an average daily trade volume of 136,700 shares. 

Historical performance of Fidelity MSCI Communication Services Index ETF over the last 5 years.
Source – NASDAQ

3. First Trust Indxx NextG ETF (NASDAQ: NXTG)

First Trust Indxx NextG ETF has been on the market since February 2011. It tracks the Indxx 5G and NextG Thematic Index and offers exposure to companies that are into research and development of the new 5G cellular technology. As of April 6, 2020, it had an opening rate of $48.16 with a change rate of 0.02%. It has an expense ratio of 0.70% with a total AUM of $302.3 million. First Trust Indxx NextG ETF has comparatively low liquidity with an average daily trade volume of 59,400 shares. 

Historical performance of First Trust Indxx NextG ETF over the last 5 years. Source – NASDAQ

Best Online Brokers for Communication Services ETFs

Online brokers can help you find the best ETFs in the communication services sector. You can trade ETFs at a $0 commission rate on most online brokers. Benzinga has hand-picked the following online brokers to help you on your investment journey. 

Self Direct Investment by JP Morgan
Best For
  • Chase Customers
securely through Self Direct Investment by JP Morgan's website

1. You Invest by J.P. Morgan

Chase You Invest is an online broker with the investing expertise of J.P. Morgan and the convenience of Chase. You can open a You Invest Trade account with a $0 minimum deposit or a You Invest Portfolio account with a $500 minimum deposit. 

You get unlimited commission-free online stocks, ETFs and options trade on Chase You Invest. You can easily research, trade and manage your investments online on the platform. Chase You Invest is regulated by the Financial Industry Regulatory Authority (FINRA). 

Firstrade
Best For
  • Mobile Investing
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2. Firstrade

Established in 1985, Firstrade has been a leading online broker for more than 3 decades. You can open an account on Firstrade with a $0 minimum deposit. It has an average trade execution speed of 0.1 second.

Firstrade offers more than 2,200 ETFs to trade with a $0 commission rate. There are more than 100 ETF providers listed with details and access to Morningstar coverage. You can backtrack the trade with a $0 redemption fee in case you sell an ETF prematurely. Firstrade is regulated by the SEC and FINRA. 

TD Ameritrade
Best For
  • Options Trading
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3. TD Ameritrade

Established in 1975, TD Ameritrade has over 11 million accounts registered with a total of more than $1 trillion in assets. You can open an account on TD Ameritrade with a $0 minimum deposit. 

ETFs can be traded commission-free on TD Ameritrade except for broker-assisted trades, which are priced at $25 per trade. Its powerful thinkorswim platform provides advanced trading tools such as comprehensive charting and customizable trading algorithms to help you monitor markets at the click of a button. TD Ameritrade is regulated by FINRA.

Gain Net Worth Through Networks

Communications services ETFs let you purchase assets in top-tier social media networks and leading mobile carriers at low costs with marginal profits. Research and review the returns from indices tracked by these ETFs before adding communications and telecom firms to your portfolio.