We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
2 Communication Services Funds to Buy on the Sector's Resilience
Read MoreHide Full Article
In 2025, the communication services sector on Wall Street has moved through a year defined by both resilience and transformation. Encompassing digital media, streaming platforms, telecom networks and broadband providers, the sector has captured investor attention in different ways. The S&P 500 Communication Services Select Sector SPDR (XLC) has progressed 15.3% year to date as of Aug. 26.
One of the biggest drivers has been the resurgence of digital advertising and the integration of artificial intelligence (AI) across platforms. Smarter recommendation systems, automated engagement and AI-enhanced content delivery have made services more efficient and profitable, renewing optimism around growth prospects. Telecom and connectivity businesses have provided a stabilizing influence, even amid market volatility. Heavy investments in 5G rollouts and fiber expansion have positioned them as defensive yet growth-oriented plays.
However, not every corner of the sector has thrived. Traditional media firms, still tied to older distribution models, have struggled to hold relevance as audiences migrate toward digital-first alternatives.
Mergers, acquisitions and partnerships have also shaped the year. Strategic deals, whether in telecom consolidation or media realignment, have reinforced the sense that adaptation is essential to survival. Companies seeking scale and efficiency have turned to restructuring as a way to remain competitive in a rapidly shifting landscape.
Overall, 2025 has underscored the sector’s dual nature. On one side, innovation in AI and digital media has created new engines of growth. On the other hand, established infrastructure and telecom services have offered reliability and long-term stability. Together, they have positioned communication services as both a defensive refuge and a forward-looking growth story. By blending adaptability with scale, the sector has signaled that its future lies in embracing both technological transformation and the enduring demand for connection.
Hence, astute investors should bet on communication services funds at present. Mutual funds, in general, reduce transaction costs and diversify portfolios without the array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected two such communication services mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive 5-year and 10-year annualized returns, minimum initial investments within $5000 and carry a low expense ratio.
DWS Science and Technology (KTCAX - Free Report) primarily invests in common stocks of science and technology companies, including communication services. For investment purposes, KTCAX advisors may concentrate on one or more industries in the technology sector.
Sebastian P. Werner has been the lead manager of KTCAX since November 2017. The three top holdings of the fund are Microsoft (9.4%), NVIDIA (8.5%) and Meta (8.4%).
KTCAX’s 3-year and 5-year annualized returns are 27.6% and 17.4%, respectively. Its net expense ratio is 0.88%. KTCAX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared with its category, and other 1 and 2 Ranked Mutual Funds, please click here.
T. Rowe Price Comm & Tech Investor (PRMTX - Free Report) primarily invests in securities of communications and technology companies. PRMTX advisors may use both growth and value approaches to make their investment decisions. The portfolio may consist of a relatively small number of holdings.
Daniel Shear has been the lead manager of PRMTX since January 2025. The three top holdings of the fund are Netflix (9.5%), Meta Platforms (9.1%) and T-Mobile (7%).
PRMTX’s 3-year and 5-year annualized returns are 20.4% and 9.4%, respectively. Its net expense ratio is 0.77%. PRMTX has a Zacks Mutual Fund Rank #1.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
2 Communication Services Funds to Buy on the Sector's Resilience
In 2025, the communication services sector on Wall Street has moved through a year defined by both resilience and transformation. Encompassing digital media, streaming platforms, telecom networks and broadband providers, the sector has captured investor attention in different ways. The S&P 500 Communication Services Select Sector SPDR (XLC) has progressed 15.3% year to date as of Aug. 26.
One of the biggest drivers has been the resurgence of digital advertising and the integration of artificial intelligence (AI) across platforms. Smarter recommendation systems, automated engagement and AI-enhanced content delivery have made services more efficient and profitable, renewing optimism around growth prospects. Telecom and connectivity businesses have provided a stabilizing influence, even amid market volatility. Heavy investments in 5G rollouts and fiber expansion have positioned them as defensive yet growth-oriented plays.
However, not every corner of the sector has thrived. Traditional media firms, still tied to older distribution models, have struggled to hold relevance as audiences migrate toward digital-first alternatives.
Mergers, acquisitions and partnerships have also shaped the year. Strategic deals, whether in telecom consolidation or media realignment, have reinforced the sense that adaptation is essential to survival. Companies seeking scale and efficiency have turned to restructuring as a way to remain competitive in a rapidly shifting landscape.
Overall, 2025 has underscored the sector’s dual nature. On one side, innovation in AI and digital media has created new engines of growth. On the other hand, established infrastructure and telecom services have offered reliability and long-term stability. Together, they have positioned communication services as both a defensive refuge and a forward-looking growth story. By blending adaptability with scale, the sector has signaled that its future lies in embracing both technological transformation and the enduring demand for connection.
Hence, astute investors should bet on communication services funds at present. Mutual funds, in general, reduce transaction costs and diversify portfolios without the array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected two such communication services mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive 5-year and 10-year annualized returns, minimum initial investments within $5000 and carry a low expense ratio.
DWS Science and Technology (KTCAX - Free Report) primarily invests in common stocks of science and technology companies, including communication services. For investment purposes, KTCAX advisors may concentrate on one or more industries in the technology sector.
Sebastian P. Werner has been the lead manager of KTCAX since November 2017. The three top holdings of the fund are Microsoft (9.4%), NVIDIA (8.5%) and Meta (8.4%).
KTCAX’s 3-year and 5-year annualized returns are 27.6% and 17.4%, respectively. Its net expense ratio is 0.88%. KTCAX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared with its category, and other 1 and 2 Ranked Mutual Funds, please click here.
T. Rowe Price Comm & Tech Investor (PRMTX - Free Report) primarily invests in securities of communications and technology companies. PRMTX advisors may use both growth and value approaches to make their investment decisions. The portfolio may consist of a relatively small number of holdings.
Daniel Shear has been the lead manager of PRMTX since January 2025. The three top holdings of the fund are Netflix (9.5%), Meta Platforms (9.1%) and T-Mobile (7%).
PRMTX’s 3-year and 5-year annualized returns are 20.4% and 9.4%, respectively. Its net expense ratio is 0.77%. PRMTX has a Zacks Mutual Fund Rank #1.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>