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Don't Overlook the Potential of Communication Services ETFs

BY | ETF Database
12:02 pm ET 06/01/26 | 7 VIEWS
  • Related Symbols
  • XLC
When the topic of sector tilts enters the conversation, one sector that might currently be flying under the radar is the communication services sector.Key Takeaways: The communication services sector has not had a breakout performance as of yet this year, but investors may be overlooking the sector’s value. Communication giants are well-positioned to benefit from AI implementation, and companies like Take-Two Interactive are posting compelling earnings results. For those looking to gain targeted exposure to the communications services sector, the State Street Communication Services Sector SPDR ETF (XLC A) offers low-cost access through the ETF wrapper. As of late, some investors have seemed to shy away from the sector due to ongoing geopolitical conditions. With price wars ongoing and inflationary pressures on the rise, some worry about how consumer spending habits could shift.  However, there are plenty of reasons to still stick with the communication services sector. To begin, those who are still enthusiastic about ongoing AI buildout and adoption could find a lot of appeal from targeted communication services exposure.  See More: Tackle Market Uncertainty With This Consumer Staples ETF When one thinks of a sector-based AI play, oftentimes they think of the tech sector, or even potentially the energy sector. However, many top companies in the communication services sector are utilizing artificial intelligence to amplify their operations. For instance, both Meta and Alphabet are implementing AI to help provide personalized advertisements to their client base.  Meanwhile, many of the individual companies within the communication services sector are posting compelling results. As just one example, Take-Two Interactive Software recently released its Q4 2026 earnings, which roundly outpaced investor expectations. Furthermore, the best may very well be yet to come, as Take-Two is slated to release Grand Theft Auto VI–a highly anticipated video game–in November.  See More: NextEra’s Dominion Megamerger: How It Affects Your PortfolioTackle the Communication Services Opportunity Set with XLCKeeping these points in mind, it could very well pay off to maintain exposure to the communication sector through a low-cost ETF. This is where the State Street Communication Services Select Sector SPDR ETF (XLC) can come into play.  With a net expense ratio of 8 basis points, XLC provides exposure to companies within the communications services sector of the S&P 500. Noticeably, this includes Take-Two Interactive, which is one of the fund’s top holdings, as of May 29, 2026.  Already, XLC’s targeted approach to sector exposure is experiencing noticeable near-term momentum. As of April 30, 2026, the fund’s NAV has risen 5.04% over the past month.  For more news, information, and analysis, visit our Sector Investing Content Hub.

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