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Is State Street SPDR S&P Telecom ETF (XTL) a Strong ETF Right Now?
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Designed to provide broad exposure to the Communication Services ETFs category of the market, the State Street SPDR S&P Telecom ETF (XTL - Free Report) is a smart beta exchange traded fund launched on 01/26/2011.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by State Street Investment Management, and has been able to amass over $817.1 million, which makes it one of the average sized ETFs in the Communication Services ETFs. This particular fund seeks to match the performance of the S&P Telecom Select Industry Index before fees and expenses.
The S&P Telecom Select Industry Index is one of nineteen S&P Select Industry Indices, each designed to measure the performance of a narrow sub-industry or group of sub-industries as defined by the GICS.Companies in the Select Industry Indices are classified based primarily on revenues; however, earnings and market perception are also considered. The Telecom Index is a modified equal weight index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for XTL are 0.35%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.87%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For XTL, it has heaviest allocation in the Information Technology sector --about 57.3% of the portfolio --while Telecom and Energy round out the top three.
Looking at individual holdings, Ciena Corp (CIEN) accounts for about 4.41% of total assets, followed by Iridium Communications Inc (IRDM) and Viavi Solutions Inc (VIAV).
The top 10 holdings account for about 37.99% of total assets under management.
Performance and Risk
The ETF has added roughly 49.6% and is up roughly 123.58% so far this year and in the past one year (as of 05/22/2026), respectively. XTL has traded between $102.15 and $231.76 during this last 52-week period.
The fund has a beta of 1.14 and standard deviation of 25.30% for the trailing three-year period, which makes XTL a medium risk choice in this particular space. With about 42 holdings, it has more concentrated exposure than peers .
Alternatives
State Street SPDR S&P Telecom ETF is an excellent option for investors seeking to outperform the Communication Services ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Communication Services Index Fund ETF Shares (VOX) tracks MSCI US Investable Market Telecommunication Services 25/50 Index and the State Street Communication Services Select Sector SPDR ETF (XLC) tracks COMMUNICATION SERVICES SELECT SECTOR IND. Vanguard Communication Services Index Fund ETF Shares has $5.97 billion in assets, State Street Communication Services Select Sector SPDR ETF has $25.28 billion. VOX has an expense ratio of 0.09% and XLC changes 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Communication Services ETFs
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is State Street SPDR S&P Telecom ETF (XTL) a Strong ETF Right Now?
Designed to provide broad exposure to the Communication Services ETFs category of the market, the State Street SPDR S&P Telecom ETF (XTL - Free Report) is a smart beta exchange traded fund launched on 01/26/2011.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by State Street Investment Management, and has been able to amass over $817.1 million, which makes it one of the average sized ETFs in the Communication Services ETFs. This particular fund seeks to match the performance of the S&P Telecom Select Industry Index before fees and expenses.
The S&P Telecom Select Industry Index is one of nineteen S&P Select Industry Indices, each designed to measure the performance of a narrow sub-industry or group of sub-industries as defined by the GICS.Companies in the Select Industry Indices are classified based primarily on revenues; however, earnings and market perception are also considered. The Telecom Index is a modified equal weight index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for XTL are 0.35%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.87%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For XTL, it has heaviest allocation in the Information Technology sector --about 57.3% of the portfolio --while Telecom and Energy round out the top three.
Looking at individual holdings, Ciena Corp (CIEN) accounts for about 4.41% of total assets, followed by Iridium Communications Inc (IRDM) and Viavi Solutions Inc (VIAV).
The top 10 holdings account for about 37.99% of total assets under management.
Performance and Risk
The ETF has added roughly 49.6% and is up roughly 123.58% so far this year and in the past one year (as of 05/22/2026), respectively. XTL has traded between $102.15 and $231.76 during this last 52-week period.
The fund has a beta of 1.14 and standard deviation of 25.30% for the trailing three-year period, which makes XTL a medium risk choice in this particular space. With about 42 holdings, it has more concentrated exposure than peers .
Alternatives
State Street SPDR S&P Telecom ETF is an excellent option for investors seeking to outperform the Communication Services ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Vanguard Communication Services Index Fund ETF Shares (VOX) tracks MSCI US Investable Market Telecommunication Services 25/50 Index and the State Street Communication Services Select Sector SPDR ETF (XLC) tracks COMMUNICATION SERVICES SELECT SECTOR IND. Vanguard Communication Services Index Fund ETF Shares has $5.97 billion in assets, State Street Communication Services Select Sector SPDR ETF has $25.28 billion. VOX has an expense ratio of 0.09% and XLC changes 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Communication Services ETFs
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.