FCOM vs IYZ

FCOMBFidelity MSCI Communication Services Index ETF

IYZCiShares U.S. Telecommunications ETF

In short

FCOM Communication services without the mega-cap chokehold: FCOM tracks an MSCI index that reaches past the giants into mid and small caps, with 25/50 caps on the biggest names, for 0.08% a year.

IYZ One of the original sector ETFs, trading since 2000 and still literal about telecom: U.S. phone, internet and communication companies, with index caps that stop any one carrier from swallowing the portfolio.

Stated mandate

FCOM The fund seeks to track the performance of the MSCI USA IMI Communication Services 25/50 Index.

IYZ The fund seeks to track an index of U.S. equities in the telecommunications sector and provides diversified access to U.S. companies offering phone, internet, and communication services.

Why people hold it

• FCOM 0.08% a year against a 0.37% median for the group: level with XLC, a hair under VOX.
• About 110 holdings through MSCI's investable market index, so mid and small cap media and telecom names ride along, not just the household giants.
• The index's 25/50 caps limit how heavy any single position can get, a guardrail in a sector where a few names carry most of the weight.
• Running since 2013 in Fidelity's index lineup, and it has tracked its benchmark closely, one of the stronger implementations in its peer group.

• IYZ Running since 2000, through the fiber build-out, the wireless wars and the streaming rewrite. Quarter-century histories are rare in sector ETFs.
• Literal about telecom by mandate: U.S. companies selling phone, internet and communication services, not the wider media-and-internet basket its broad peers carry.ishares.com
• The index trims at each quarterly rebalance: no single issuer above 22.5%, and issuers over 4.5% capped at 45% combined. The giant carriers get pruned by rule, not by hope.sec.gov
• Actively traded with BlackRock's iShares plumbing behind it, and cash goes out on a quarterly schedule.

Worth knowing

• FCOM Communication services is a narrow slice of the market, and the same handful of search, streaming and telecom giants dominate it however the weights are capped.
• Moderately traded rather than the category's volume leader, so spreads can run wider than at the busiest fund on the shelf.
• Distributions arrive quarterly, and the mandate is sector exposure, not income.

• IYZ The fee is a step up: 0.37% versus single-digit basis points on the broad communication services trackers in this group (XLC, FCOM, VOX). That is the toll for the narrower cut.
• Concentrated by design: roughly two dozen holdings, and the cap rules still leave room for one issuer to sit near 22.5% of the fund.ishares.comsec.gov
• One sector, one country. It rides U.S. telecom, so its path can look nothing like a total-market fund's in either direction.

Full FCOM profile⁠

Full IYZ profile⁠