Invesco has broadened its range of US sector products with the launch of an ETF that provides exposure to the new communications sector of the S&P index.
The fund, which is the eleventh fund in the Invesco S&P Select Sector Ucits ETF range, comes at an ongoing charge of 0.14 per cent per annum.
In September a new communication services sector will replace the current telecoms sector of the S&P index, which will include some of the biggest tech stocks including Facebook and Netflix.
The new sector classification expands the previous telecommunication services sector to include companies involved more widely and directly in the new communication era, with companies being reclassified from segments of the technology and consumer discretionary sectors.
Chris Mellor, head of EMEA ETF equity product management at Invesco, said: "The new sector is significant in terms of size and economic exposure, and the greater number of stocks enables us to create a diversified, investable fund to track its performance.
"The old Telecommunication Services sector contained only three stocks, so you couldn’t create a standalone fund for it and instead it was combined with the IT sector in our technology sector ETF."
He added: "Plus, those companies are defensive in nature whereas the new, broader communications sector will offer higher growth potential, albeit with higher risk, and give investors the opportunity to access more cyclical companies."
The 26 stocks in the new sector will include some of the largest companies in the world, with household names such as Twitter, Facebook, Netflix and Disney.
Communications will make up about 10 per cent of the S&P 500, making it one of the largest sectors in the index.
Jason Hollands, managing director at Tilney Investment, said: "This provides fund selectors who specifically want to narrow in on this sector with exposure at low cost, so it is a welcome addition to Invesco’s extensive ETF product range.
"Whether you would want to invest in this space now, is of course another matter. Valuations are quite rich in this part of the market, buoyed in part by heavy levels of share buyback activity this year – but that’s a call for investors and their advisers to make."