Sector Change May be a Non-Starter For Telecom Stocks

XLC is the first ETF dedicated to the new communication services sector. The new ETF tracks the Communication Services Select Sector Index and “seeks to provide precise exposure to companies from the media, retailing, and software & services industries in the U.S.,” according to State Street Global Advisors (SsgA).

“But many active investors may still ignore telecom stocks, which are typically viewed as defensive investments because of slower, though relatively predictable, growth rates and high dividends,” according to Reuters. “Instead, they may look to faster-growing internet or media companies for exposure to the growth oriented communications sector.”

Investors appear to like the new look communication services sector. XLC is just three months old and already has nearly $692 million in assets under management.

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