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Exchange traded funds that invest in global telecom stocks can provide secure dividends for investors on the hunt for yield, according to Standard & Poor’s.

Based on the rising risk of a global recession and insufficient governmental policies, S&P is leaning toward defensive sectors, says S&P Capital IQ Equity Analyst Todd Rosenbluth.

“With the 10-year Treasury bond yield below 2%, investors are searching for yield. Telecommunication services stocks, both domestically and internationally, generally offer what S&P Capital IQ believes are stable dividends that have appeal in light of macroeconomic uncertainties,” the analyst wrote in a research note.

“We believe that certain telecom companies, while exposed to potential macroeconomic weakness, offer favorable total return potential as their relatively stable customer bases provide strong cash flow to support the dividend and reinvest in the business for growth,” Rosenbluth said.

S&P’s top picks in the category are iShares MSCI ACWI ex US Telecommunication Services Sector Index Fund (NYSEARCA:AXTE) and SPDR S&P International Telecommunications Sector ETF (NYSEARCA:IST). Both funds hold telecom companies domiciled outside of the U.S.

AXTE has $3 million in assets. The ETF’s top-10 holdings comprise 57% of the portfolio. Geographically, the emerging markets make up 21% of assets. AXTE has an expense ratio of 0.48%. The ETF has a dividend yield of 5.6%.

The IST fund has a little over $10 million in assets. The ETF’s top-10 holdings comprise 66% of the portfolio. IST has an expense ratio of 0.50%, and a dividend yield of 5.4%.

iShares MSCI ACWI ex US Telecommunication Services Sector Index Fund

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SPDR S&P International Telecommunications Sector ETF

Max Chen contributed to this article.

Disclosure: None

Source: S&P's Best 2 ETFs For International Telecom Stocks