2018 saw the retooling of the telecom sector into the communication services sector. The new category contains not only traditional telecommunications companies, but some names from the technology and consumer discretionary sectors as well. Communication services companies include major telecommunications networks like AT&T and Verizon, as well as several of the FAANG stocks, The Walt Disney Company and more.

Early on in the year, the stocks representing the new sector performed exceptionally well. Indeed, the S&P Communication Services Select Sector, the first benchmark index for the new sector, returned more than 143% for the year through May 16, 2018. However, that momentum could not sustain throughout the year. In the face of increasing geopolitical tensions, four Fed interest rate hikes across 2018, and a massive market downturn in the final weeks of the year, many names in this new sector ended the year with losses overall.

As a new sector, communication services does not have many dedicated exchange-traded funds (ETFs). In fact, there are only a handful of such funds with a specialized focus on the communication services landscape. Still, these funds produced dramatically different results for the year, with some outperforming the S&P Communication Services Select Sector benchmark and others failing to match it. All of the top five ETFs focused on this category posted overall losses for 2018. Below, we'll take a closer look at these funds, comparing them to one another and to the S&P benchmark of -10.0%.

1. Invesco S&P SmallCap Utilities & Communication Services ETF (PSCU)

Returns for 2018: -4.5%

2. Fidelity MSCI Telecommunication Services Index ETF (FCOM)

Returns for 2018: -5.7%

3. Invesco S&P 500 Equal Weight Communication Services ETF (EWCO)

Returns for 2018: -13.5%

4. iShares Global Comm Services ETF (IXP)

Returns for 2018: -14.3%

5. Vanguard Communication Services ETF (VOX)

Returns for 2018: -15.3%

Invesco S&P SmallCap Utilities & Communication Services ETF

The top-performing ETF focused on the communication services sector for 2018 was the Invesco S&P SmallCap Utilities & Communication Services fund (PSCU). As the name indicates, PSCU actually splits its focus between communication services companies and utilities firms, drawing its portfolio from the S&P SmallCap 600 Index and weighting its selections by market cap. It is telling that the best performer among ETFs focused on the new sector is one that also includes small natural gas companies, electric utilities companies and more. It was also one of just two funds to outperform our benchmark for the year, with overall returns of -4.5%.

PSCU was launched in April of 2010 and carries an expense ratio of 0.29%. It has $57.4 million in its asset base.

Fidelity MSCI Telecommunication Services Index ETF

With returns of -5.7%, the second communication services fund to outperform the benchmark for 2018 was the Fidelity MSCI Telecommunication Services Index ETF (FCOM). FCOM tracks the MSCI telecommunication services index, setting itself apart from other funds by its low fees, although it remains close to the benchmark of some larger competitors.

FCOM was launched in October of 2013 and carries an expense ratio of just 0.08%. It has $255.2 million in assets under management as of this writing.

Invesco S&P 500 Equal Weight Communication Services ETF

Although the Invesco S&P 500 Equal Weight Communication Services ETF (EWCO) is number three communication services fund on our list, it failed to outperform the S&P Select Sector benchmark for 2018. EWCO returned -13.5% for the year. However, some of this performance may be due to the fact that EWCO launched very late in the year and is still essentially a brand new fund. This fund tracks an index of U.S. telecom and media/entertainment companies from the S&P 500. The index is weighted equally, meaning that some of the leaders of these industries are underweighted in favor of smaller companies.

EWCO launched in November of 2018, making it one of the newest ETFs available to investors. It carries an expense ratio of 0.40% and has $17.4 million in assets under management.

iShares Global Comm Services ETF

With returns of -14.3%, the iShares Global Comm Services ETF (IXP) also failed to outperform the benchmark index in 2018. IXP follows a market-cap-weighted index of telecommunications names from around the globe. It is currently the only such fund to focus on the global telecom area. In general, IXP tends to track fairly well to the broader stock market, which means that it is no surprise that it ended the year deep in the red.

IXP launched in November of 2001 and carries an expense ratio of 0.47%. It has assets under management of $242.9 million.

Vanguard Communication Services ETF

Claiming the final spot on our list is the Vanguard Communication Services ETF (VOX), which returned -15.3% for the year. This fund provides exposure to communication services companies in the U.S., specifically focusing on those firms which provide cable network services and media content. It skews heavily toward major telecom names like Verizon and AT&T, meaning that VOX is not particularly diversified.

VOX launched in September of 2004 and carries an expense ratio of 0.1%. It is one of the largest ETFs in the space, with assets under management of $1.26 billion.