XLC: A Communication Services ETF with a Heavy Bias Toward Big Tech

The Communication Services Select Sector SPDR ETF (XLC) tracks the S&P 500 Communication Services sector and is heavily weighted towards big tech companies. With 11 ETFs from State Street Investment Management, XLC is one of the sector-specific ETFs designed to track specific sectors within the S&P 500.

The Communication Services Select Sector SPDR ETF (XLC) ended the week with a 0.1% increase, compared to a 0.6% rise in the S&P 500 index. This performance reflects the sector's overall resilience despite some notable fluctuations among individual stocks. Warner Bros. Discovery (WBD) emerged as the top gainer, surging 8.7% over the past five sessions ended July 18, while Netflix (NFLX) retreated 2.9%, despite beating earnings expectations and raising full-year revenue guidance [1].

Warner Bros. Discovery's performance was bolstered by its strong media and entertainment offerings, while Netflix's retreat can be attributed to the company's continued focus on subscriber growth and ad sales. The latter's Q2 earnings report highlighted its resilience in the face of economic challenges, with revenues rising 16% year-over-year to $11.08 billion and earnings per share (EPS) of $7.19, surpassing estimates [3].

Other notable performers in the sector included The Trade Desk (TTD), which advanced 6.4% following its inclusion in the S&P 500 Index, and Live Nation Entertainment (LYV), which gained 4.6%. Google's parent company, Alphabet (GOOGL), moved up 2.7% and 2.6% respectively. On the losing side, Charter Communications (CHTR) fell 2.6%, while advertising and marketing companies Omnicom (OMC) and Interpublic Group of Companies (IPG) slipped 2.3% each. Verizon Communications (VZ) shed 1.9% in the week [1].

State Street Investment Management, the issuer of XLC, has seen robust performance in its ETF offerings. In its latest Q2 2025 earnings report, State Street Corporation reported an EPS of $2.17, or $2.53 excluding notable items, alongside record assets under custody and administration (AUC/A) of $49 trillion and assets under management (AUM) of $5 trillion. The company's total revenue increased by 8% year-over-year, driven by a 11% rise in fee revenue [2].

The Communication Services Select Sector SPDR Fund (XLC) offers exposure to companies from telecommunication services, media, entertainment, and interactive media & services. It is heavily weighted towards big tech companies and is one of the sector-specific ETFs designed to track specific sectors within the S&P 500. Investors seeking to tap into the sector's performance can consider XLC, along with other ETFs such as the First Trust Dow Jones Internet Index Fund (FDN), FT Vest Dow Jones Internet & Target Income ETF (FDND), MicroSectors FANG+ ETN (FNGS), and Invesco Next Gen Media and Gaming ETF (GGME) [3].

References:
[1] https://seekingalpha.com/news/4469020-biggest-weekly-communication-services-gainers-losers-warner-bros-discovery-leads-netflix-top-decliner
[2] https://www.theglobeandmail.com/investing/markets/stocks/STT/pressreleases/33453657/state-street-reports-strong-q2-2025-financial-results/
[3] https://www.theglobeandmail.com/investing/markets/stocks/NFLX/pressreleases/33496404/etfs-to-tap-netflixs-q2-earnings-beat-upbeat-outlook/