Last year, index providers MSCI and Standard & Poor’s announced the telecommunications sectors would be renamed communications services and would add companies from the consumer discretionary and technology sectors. Tech additions include Facebook and Google parent Alphabet Inc.
There are other factors that could contribute to XLC bouncing back following the Facebook tumble.
“Remeber the basket of securities included in the Communication Services sector represents an exposure of quality growth at a reasonable price, given the sector’s above-market earnings growth estimates combined with attractive valuations and less-levered balance sheets,” said SSgA.
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