The State Street SPDR S&P Telecom ETF (NYSEARCA: XTL) has emerged as one of the stronger-performing exchange-traded funds within the communication services sector, benefiting from its equal-weight investment strategy and exposure to communications infrastructure companies.

Launched in January 2011, the ETF seeks to replicate the performance of the S&P Telecom Select Industry Index, providing investors with exposure to a focused group of telecommunications and related technology companies rather than concentrating heavily on a handful of mega-cap firms.

Equal-Weight Strategy Differentiates XTL

Unlike traditional market-cap weighted ETFs, XTL employs a modified equal-weight methodology.

Smart beta ETFs such as XTL seek to improve long-term risk-adjusted returns by reducing concentration in the largest companies and distributing portfolio weight more evenly across holdings. This approach can allow smaller and mid-sized companies to contribute more meaningfully to overall performance.

The fund currently manages approximately $572.3 million in assets, placing it among the mid-sized ETFs within the communication services category.

Portfolio Composition

XTL holds approximately 42 companies, providing relatively concentrated exposure compared to broader communication services funds.

Information technology represents the largest allocation at approximately 54.7% of the portfolio, followed by telecommunications and energy-related holdings.

Among its largest individual positions are Viasat, Arista Networks, and Anterix, with the fund’s ten largest holdings accounting for roughly 34.4% of total assets. This diversified allocation helps reduce dependence on any single stock while still maintaining meaningful exposure to sector leaders.

Performance Remains Strong

The ETF has delivered impressive returns over the past year.

As of early August 2026, XTL has gained approximately 36.9% year-to-date and 75.3% over the previous twelve months. During the past year, the ETF traded within a range of approximately $123 to $248 per share.

The fund carries a beta of 1.15 and a three-year standard deviation of 26.2%, indicating moderately higher volatility than the broader market. Investors should expect larger price swings compared with diversified market index funds.

Costs and Income

XTL charges an annual expense ratio of 0.35%, placing it roughly in line with many specialized sector ETFs but above the fees charged by large market-cap weighted alternatives.

The ETF currently offers a trailing twelve-month dividend yield of approximately 1.27%, providing modest income alongside its growth-oriented profile.

Alternative Communication Services ETFs

Investors seeking broader exposure or lower costs may also consider other communication services ETFs.

The Vanguard Communication Services ETF (VOX) tracks a broader market-cap weighted communications index while charging a lower expense ratio of 0.09%.

Similarly, the Communication Services Select Sector SPDR Fund (XLC) offers diversified exposure to major communication services companies with an expense ratio of just 0.08%. Both funds manage substantially larger asset bases than XTL and may appeal to investors prioritizing lower costs and broader diversification.

Outlook

XTL offers investors an attractive option for gaining exposure to the communications sector through a smart beta, equal-weight approach that has delivered strong recent performance. Its diversified exposure across telecommunications infrastructure and technology companies may continue to benefit from ongoing investment in networking, connectivity, cloud infrastructure, and digital communications. However, investors should weigh the fund’s higher volatility, concentrated portfolio, and above-average expense ratio against lower-cost alternatives before making an investment decision.