Today saw the launch of a new Select Sector SPDR ETF. The Communication Services Select Sector SPDR Fund (XLC) represents a new sector that includes the telecommunication services sector and pulls in a variety of consumer discretionary companies. The new fund reflects changes to the Global Industry Classification Standard used by S&P Dow Jones Indices and MSCI that will become effective Sept. 21.
As with all the other ETFs in the Select Sector SPDR fund family, XLC comes with an expense ratio of 0.13% and lists on the NYSE Arca.
Heavy Online Presence
The new fund includes not only firms like Verizon Communications and AT&T, but also Facebook, Google parent Alphabet, Netflix and Twitter.
2015 saw the most recent major change to the GICS sector structure, with the introduction of the real estate sector. However, it was a much simpler change, with real estate companies mostly being pulled out of the financial sector. The Real Estate Select Sector SPDR Fund (XLRE) currently has $2.4 billion in assets under management.
The situation with XLC is a little more complex. First of all, telecommunications has always been included in the technology sector with the Select Sector SPDR funds, rather than standing on its own. So presumably there will be some rejiggering that will pull a significant number of stocks from the existing Technology Select Sector SPDR Fund (XLK) and somewhat less from the Consumer Discretionary Select Sector SPDR Fund (XLY).
There are currently 11 Select Sector SPDR ETFs trading.
Contact Heather Bell at [email protected]