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Is State Street SPDR S&P Telecom ETF (XTL) a Strong ETF Right Now?
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The State Street SPDR S&P Telecom ETF (XTL - Free Report) was launched on 01/26/2011, and is a smart beta exchange traded fund designed to offer broad exposure to the Communication Services ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $551.17 million, this makes it one of the average sized ETFs in the Communication Services ETFs. XTL is managed by State Street Investment Management. 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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.92%.
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.
Representing 56.2% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Telecom and Energy round out the top three.
When you look at individual holdings, Arista Networks Inc (ANET) accounts for about 4.28% of the fund's total assets, followed by Viasat Inc (VSAT) and Motorola Solutions Inc (MSI).
The top 10 holdings account for about 37.06% of total assets under management.
Performance and Risk
Year-to-date, the State Street SPDR S&P Telecom ETF has added roughly 38.37% so far, and is up about 46.34% over the last 12 months (as of 10/05/2026). XTL has traded between $132.63 $247.62 in this past 52-week period.
The ETF has a beta of 1.17 and standard deviation of 26.28% for the trailing three-year period, making it a medium risk choice in the 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 $5.78 billion in assets, State Street Communication Services Select Sector SPDR ETF has $22.37 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?
The State Street SPDR S&P Telecom ETF (XTL - Free Report) was launched on 01/26/2011, and is a smart beta exchange traded fund designed to offer broad exposure to the Communication Services ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $551.17 million, this makes it one of the average sized ETFs in the Communication Services ETFs. XTL is managed by State Street Investment Management. 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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.92%.
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.
Representing 56.2% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Telecom and Energy round out the top three.
When you look at individual holdings, Arista Networks Inc (ANET) accounts for about 4.28% of the fund's total assets, followed by Viasat Inc (VSAT) and Motorola Solutions Inc (MSI).
The top 10 holdings account for about 37.06% of total assets under management.
Performance and Risk
Year-to-date, the State Street SPDR S&P Telecom ETF has added roughly 38.37% so far, and is up about 46.34% over the last 12 months (as of 10/05/2026). XTL has traded between $132.63 $247.62 in this past 52-week period.
The ETF has a beta of 1.17 and standard deviation of 26.28% for the trailing three-year period, making it a medium risk choice in the 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 $5.78 billion in assets, State Street Communication Services Select Sector SPDR ETF has $22.37 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.