Liberty One Spectrum ETF (SPCT)

Liberty One Spectrum ETF (ticker SPCT) began as a focused thesis: that companies owning and operating licensed radio-frequency spectrum — the invisible highways that carry cellular and wireless signals — would prove to be some of the most durable assets in modern communications.

Origins and thesis

SPCT launched during a period when wireless spectrum was becoming increasingly scarce and valuable. Unlike common commodities, spectrum is finite: governments license specific frequency bands in specific geographies to prevent interference, and licenses expire and come up for periodic auction. This scarcity gives spectrum holders a quasi-monopoly on a critical infrastructure asset.

The fund’s creators believed that as wireless data consumption accelerated — driven by smartphones, IoT devices, and mobile video — the companies holding spectrum would become essential chokepoints, commanding pricing power and generating stable cash flows. A company that owns spectrum in a major metropolitan area has enormous value because it can rent that spectrum to mobile carriers or deploy wireless services on it. Spectrum itself, unlike cell towers or retail stores, cannot be replicated or easily substituted.

The spectrum landscape

SPCT’s holdings reflect the main categories of spectrum-owning businesses. Major wireless carriers like Verizon, AT&T, and T-Mobile hold vast amounts of spectrum across multiple frequency bands and geographies, accumulated through decades of auctions and acquisitions. Smaller regional carriers and wireless service providers also own spectrum, giving them a competitive foothold.

The fund also captures companies that have monetized spectrum holdings without operating a full cellular network — entities that acquired frequencies through auction or from bankrupt carriers and now lease or sell access to carriers and private wireless operators. These spectrum-light plays offer pure exposure to spectrum scarcity without the operational complexity of running nationwide networks.

Evolution of the spectrum market

When SPCT launched, spectrum was newly seen as a valuable asset class in its own right. Governments had historically treated spectrum auctions as revenue events rather than property markets, selling licenses for years or decades and then reallocating frequencies. The realization that spectrum was a permanent, tradable asset — and that shortages would keep it valuable forever — changed the investment thesis.

Subsequent spectrum auctions, driven by the race to deploy faster networks (3G, 4G LTE, and now 5G), pushed spectrum prices upward dramatically. In the United States, the FCC’s mid-band spectrum auctions and high-band auctions fetched tens of billions of dollars, reflecting that both carriers and new entrants recognized spectrum’s necessity.

This proved the original thesis: spectrum owners have become more valuable, not less, as wireless becomes more critical.

Concentration and competitive dynamics

SPCT, like any spectrum-focused fund, carries concentration risk. Wireless spectrum in most countries is concentrated among a handful of major carriers — in the United States, Verizon, AT&T, and T-Mobile dominate. This means SPCT will be weighted toward these three firms and a handful of smaller regional players, rather than offering broad diversification. Investors essentially get a bet on the telecom sector rather than a balanced slice of all public companies.

Competition for spectrum at auction has intensified, particularly as new entrants (like satellite-internet providers buying spectrum for complementary services) compete with traditional carriers. Regulatory changes that reallocate spectrum — such as decisions to free up frequencies for unlicensed use or to favor specific uses — can unexpectedly alter the value of existing licenses.

The fund today

Over its lifetime, SPCT has ridden the strong secular trends in wireless data. As smartphone penetration matured and video consumption moved to mobile devices, carriers needed more spectrum to keep networks uncongested. The urgency only increased during the pandemic and after, with remote work driving demand for mobile data capacity and latency.

SPCT’s performance has reflected both the stability of its underlying holdings (major carriers generate reliable cash flows) and the cyclical swings in telecom valuations. During periods of rapid technology change and capital intensity (like 5G buildouts), telecom can underperform. During periods of mature network operation and stable returns, it outperforms.

Positioning for the future

The spectrum landscape is entering new phases. Terahertz frequencies, satellite spectrum, and unlicensed spectrum bands are attracting attention, potentially fragmenting what was once a clear spectrum hierarchy. Artificial intelligence and edge computing may change the topology of wireless networks, reducing the value of raw spectrum in favor of computing infrastructure closer to users.

SPCT remains a pure play on spectrum scarcity and the communications infrastructure built on it. Investors choosing it are betting that spectrum will continue to be the bottleneck limiting network performance and capacity, and that the companies holding it will capture the value this creates.

Researching the fund

The prospectus and holdings reveal the fund’s weighting toward the major carriers and any smaller spectrum holders included. Study how the fund’s returns correlate with the wireless sector and with spectrum-auction cycles. Check the turnover: a pure theme index fund should turn slowly, as spectrum ownership is relatively stable. Compare the fund’s expense ratio against owning the underlying carriers directly, to assess whether the themed focus is adding or subtracting value through fees.