Alphabet

Netflix

Disney

Take-Two Interactive Software

T-Mobile US

Charter Communications

Electronic Arts

Comcast

Communication Services Select Sector SPDR Fund

XLC tracks a market-cap-weighted index of US telecommunication and media & entertainment components of the S&P 500 index.

I recommend holding the Communication Services Select Sector SPDR® ETF Fund due to strong momentum since the Fed's first rate cut in September. Despite positive momentum, historical data shows the communications sector averages -8% returns in the 12 months following initial rate cuts. The ETF's current valuation at 18x earnings suggests a 5.5% downside, supporting a hold recommendation rather than a sell.

XLC: Hold On, But Be Prepared To Sell

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The S&P 500 Index has returned nearly 81% since the last presidential election, with a wide disparity between sector performance. The S&P 500's gains since Nov. 3, 2020 reflect an annual return of nearly 16%, an impressive figure.

Breaking Down S&P 500 Returns by Sector Since 2020 Election

State Street Global Advisors have revamped the weighting and rebalancing methodology for their 11 Select Sector SPDR® Funds, significantly impacting funds like XLK and XLC. The new system mitigates extreme rebalancing by capping weights at 24% and ensuring a more balanced distribution among top holdings. These changes aim to lower turnover and create smoother rebalancing, benefiting all Select Sector SPDR ETFs and potentially improving performance.

XLC: A Major Change To Fund Composition And An End To The High Concentration

XLC offers targeted exposure to top communication services companies like Meta, Alphabet, and Netflix, balancing growth and stability with a competitive 0.09% expense ratio. The ETF's sector-focused strategy can benefit from both value and growth investment styles, but high concentration risks and sector cyclicality are concerns. Compared to Vanguard's VOX, XLC has outperformed due to its concentrated holdings in leading tech companies, making it a strong contender in a "Mag 7" world.

XLC: Meta And Google Domination Has Helped

Sector-oriented exchange-traded funds (ETFs) offer a way to gain exposure to an entire portfolio of companies that may be benefiting from trends in the market. They provide diversification from the business-specific risk of investing in just individual companies.

Analysts Recommend These 3 Sector ETFs for Long-Term Growth

While the US stock market recovered recent losses, the risk of a downtrend is still high due to lofty valuations. However, the outlook for double-digit growth, rate cuts, and soft landing could drive market higher. As the market can swing either way, investment vehicles like the Communication Services Select Sector SPDR® ETF Fund could be the best option to deal with uncertainty.

XLC: A Worth Considering ETF With Cheap Valuations And Solid Earnings Growth To Face Uncertainty

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Consumer Discretionary Select Sector SPDR Fund

In the first half of 2024, I published a lot of content on ETF Trends and VettaFi's other websites. Pieces included a focus on free cash flow ETFs, robotics, and the success of newer ETF entrants.

Magnificent Seven Covered Calls & Vanguard in Focus

Over the past six months, the tech sector has been trailing behind communications services.

Tech Sector Lags Communication Services Despite Super Micro, Nvidia Surge

The Communication Services Select Sector SPDR Fund XLC is probably on the radar for investors seeking momentum. The fund just hit a 52-week high and is up 36.6% from its 52-week low of $62.82 per share.

Communication Services ETF (XLC) Hits New 52-Week High

2024 has been a strong year for stock picking and sector rotations, with XLC leading as the best performing sector ETF YTD. XLC is heavily weighted towards META and GOOGL, with the top 10 stocks making up a large portion of the fund. The composition of XLC reflects the convergence between technology, media, and telecom, but may be too disparate for some investors to consider buying.

XLC: The Best Performing Sector In 2024, But A Confusing Mix

The Communication Services Select Sector SPDR® Fund ETF is an eclectic combination of high-tech mega-cap stocks and telecom & cable utilities, streaming, and media content companies. XLC is a surprisingly high growth portfolio (18% EPS growth) at a reasonable valuation at 1.1x PEG. Consensus price targets point to over 20% upside potential to YE24.

XLC: An Eclectic Growth ETF

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On Apr 26, 2024, Google-parent Alphabet (GOOGL) officially joined the prestigious $2 trillion club. There are more room for growth.

Alphabet Joins $2T Club, More Growth Likely: ETFs to Win

Look into ETFs with heavy exposure to Alphabet as the tech giant reports better-than-expected first-quarter 2024 results and also announces a cash dividend with plans to uphold a quarterly cash dividend distribution policy.

Google Heavy ETFs Surge Following Upbeat Q1 Earnings

Global X Social Media ETF

Meta Platforms (META) beat on both the top and bottom lines but falters on weak revenue and higher spending forecast.

Meta Sinks on Weak Outlook Despite Q1 Beat: ETFs in Focus

Meta Platforms (META) has a strong chance of beating estimates on earnings and saw positive earnings revision activity, which is generally a precursor to an earnings beat.

Meta Platforms ETFs to Buy Ahead of Q1 Earnings

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Reddit Inc

The popular social media platform Reddit (RDDT) celebrated a triumphant entry to the New York Stock Exchange on Thursday, with its shares skyrocketing 48% on debut.

Reddit's Successful IPO Puts These ETFs in Focus

The US stock market is expected to continue its bull run in 2024, with analysts predicting the S&P 500 to reach around 5400 points. The Federal Reserve is expected to initiate rate cuts, which will likely add to the bull run and increase market activity. The communication services sector, including top holdings in the XLC ETF such as Meta, Alphabet, and Netflix, is expected to generate strong earnings growth and contribute to the ETF's upside.

XLC: More Upside Is Ahead

Communication Services sector had a strong performance in 2023, led by stocks like Meta Platforms, Netflix, and Alphabet. The Communication Services Select Sector SPDR Fund has outperformed the S&P 500 Index on a trailing 1-year basis. XLC is a beneficiary of tailwinds in the communication services and digital ad stocks, making it a strong long-term prospect.

XLC: Robust Outlook To Turbocharge Runway Potential

For investors seeking momentum, Communication Services Select Sector SPDR ETF XLC is probably on the radar. The fund just hit a 52-week high and is up 48.1% from its 52-week low price of $54.71/share.

Communication ETF (XLC) Hits a New 52-Week High

ALPS Equal Sector Weight ETF

Capital markets appear content with playing the rate cut waiting game as the S&P 500 continues to rise to new highs. Meanwhile, renewed volatility could make investors reconsider adding an equal weight strategy to their portfolios.

Consider an Equal Weight Strategy Amid Renewed Volatility

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Bargain hunting in a market where the S&P 500 is at record levels may seem like a daunting task, but it's not impossible.

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As Reddit prepares for its stock market debut, industry observers eagerly anticipate the platform's future trajectory and its role in the ever-evolving landscape of social media and technology.

Reddit's IPO Filing Puts These ETFs in Focus

Even if you have not heard of the Magnificent Seven stocks as a group, you likely know the companies.   The Magnificent Seven comprises Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN), Nvidia (NVDA), Meta Platforms (META), Tesla (TSLA), and Alphabet (GOOG/GOOGL).

Magnificent Seven Stocks Are in Different Sectors

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Look into how Disney heavy ETFs performed after its Q1 earnings.

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The S&P 500's Q3 of 2023 dividends increased 0.7% to a record $144.2 billion from Q2 of 2023's $143.2 billion and were 2.7% higher than the $140.3 billion recorded in Q3 of 2022.

News for Communication Services Select Sector SPDR Fund ETF (XLC)