U.S. Telecom

1
U.S. Telecom

• (IYZ)

2
Why an ETF?

• Buy and hold investing style
• Relatively safe play
• Telecom growth/volatility (alpha 5.5)
• CAPM models undervalue given risk
• Sector up 20-30 in last year
• Returned 16 in last 3 months
• Still trading near historical lows

3
IYZ

• Alltel (4.56)
• ATT (21.87)
• BCE (3.44) - Canada
• BellSouth (4.88)
• CenturyTel (4.21)
• Citizen Com (2.89)
• NII Holdings (4.4) - Latin America
• Qwest (4.33)
• Sprint Nextel (7.57)
• Verizon Communications (19.82)

4
Comparable Funds

• Telecom HOLDRs (TTH)
• Same except Level 3 Comm
• PowerShares Dynamic Telecom Wireless (PTE)
• Cisco, DirecTV, United Online, Comcast
• Vanguard Telecom Services (VOX)
• Expensive, capped
• Dueled with IXP (foreign bundle) in 2005

5
Comparable Funds
6
Charts
7
Conclusion

• Buy 90 shares
• 18 months or 37