SPDR S&P Telecom ETF

XTL

Market cap $166M

XTL has evolved from a defensive, income-focused telecom ETF to a growth-oriented fund driven by AI, 5G, and cloud infrastructure exposure. Recent macro headwinds—Trump's tariffs, a more hawkish Fed, and weaker global growth—have increased risks and pressured XTL's growth-focused holdings. Fiscal stimulus via the One Big Beautiful Bill and deregulation could offset some headwinds, supporting capital investment and telecom infrastructure buildout.

The 'Undercovered' Dozen series highlights lesser-known ETFs featuring in-depth analyses and offering unique investment opportunities for investors. The Mount Lucas Managed Futures Index Strategy ETF, Columbia India Consumer ETF, SPDR EURO STOXX 50 ETF, and Global X MSCI Greece ETF are recommended buys due to their strategic advantages and market positions. Invesco Dorsey Wright Industrials Momentum ETF and CoinShares Bitcoin Miners ETF receive hold ratings due to sector-specific challenges and concerns about diversification and expense ratios.

SPDR S&P Telecom ETF warrants a hold rating due to slow growth characteristics and higher fees compared to competitor ETFs. XTL's top holdings, including AT&T, AST SpaceMobile, and T-Mobile, face growth challenges and competitive pressures, impacting future performance. Despite recent strong share price performance, XTL's valuation is on par with peers, with higher volatility and opportunity costs for investors.

Look at telecom ETFs as companies report fourth-quarter 2024 earnings.

The SPDR® S&P Telecom ETF has shifted from traditional telecom stocks to growth-oriented investments, focusing on 5G, cloud computing, and AI-driven data centers. The XTL ETF's low dividend yield of 0.56% contrasts sharply with traditional telecom ETFs, reflecting its pivot towards growth and strong price appreciation. AI and data center demand are key drivers, with top holdings like Ciena, Applied Optoelectronics, and Arista Networks showing significant growth and strategic positioning.

We have highlighted some investing strategies that could be extremely beneficial for investors heading into the fourth quarter.

Despite volatility, the S&P 500 emerged stronger in the third quarter, touching a series of new record highs. It was the index's best quarter since Q4 2021.

We have highlighted five top-performing ETFs from different sectors of the market that have led the way higher in the third quarter.

Sector ETFs, which are the major beneficiaries of a rate cut, rallied to new 52-week highs.

With recession concerns easing and Fed rate cut talks rising, Wall Street closed August with renewed optimism.