State Street Communication Services Select Sector SPDR ETF

XLC

Market cap $25.2B

Communication Services Select Sector SPDR Fund (NYSEARCA:XLC) is down 8.78% year to date, and the two stocks most responsible for that slide are the ones you need to watch most closely over the next 12 months.

State Street Com Svc Sel Sec SPDR ETF is downgraded to hold after a strong rally from April 2025 lows. XLC trades at 17x earnings with a 9.3% long-term growth rate, yielding a PEG just under 2.0x—reasonable but not compelling.

Today's market continues to evolve at a rapid clip. That said, traditional broad market exposure is unable to accurately capture long-term secular trends.

Sector investing — it's a typical strategy for advisors if their clients are looking beyond broad market exposure by targeting a specific sector. The concept is fairly straightforward, but implementing the strategy is not as simple as it sounds.

When investors buy a sector ETF, they want exposure to a specific corner of the market without picking individual stocks.

Energy, basic materials, and defensive consumer stocks are in. Tech and financials are out.

Months before Super Bowl LX kicks off at Levi's Stadium on February 9, the game was already being played, predicted, and celebrated across screens worldwide through companies held in the Amplify Video Game Leaders ETF (GAMR).

IT has been driven by AI spending, which looks likely to continue in 2026. Demand for cloud compute and storage is expected to soar.

Utilities are delivering strong results into 2025, driven by AI-fueled data center demand, with the sector generating strong returns from what are otherwise generally boring businesses. Over the long run, utilities and other infrastructure names can generate strong cash flows that go to fueling growing dividends. Putting these names in a closed-end fund wrapper, along with other income-generating assets, can produce attractive monthly distributions.

Why I Think XLY And XLC Stand Out Over Tech In 2026