FCOM vs XLC

FCOMBFidelity MSCI Communication Services Index ETF

XLCAState Street Communication Services Select Sector SPDR 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.

XLC Launched in 2018, XLC bottles the communication services corner of the S&P 500: search, social, streaming and the phone companies, in one 0.08% wrapper that trades heavily all day.

Stated mandate

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

XLC The fund seeks to track, before expenses, the price and yield performance of the Communication Services Select Sector Index.

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.

• XLC Costs 0.08% a year, a fraction of the typical fund in this sector group and tied with the cheapest of them (FCOM at 0.08%, VOX at 0.09%).
• A multi-billion-dollar fund and one of the busiest tickers in its category, so getting in and out is rarely the hard part.
• Clean, rules-based job: it shadows the Communication Services Select Sector Index closely, one of the tightest implementations in its peer group.ssga.com
• Large-cap only: constituents come from the S&P 500, spanning telecom, media, entertainment and interactive media, with S&P capping rules limiting how big any one name gets.ssga.comspglobal.com

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.

• XLC This is the most top-heavy neighborhood in the index. Even with capping at rebalance, a few mega-cap internet names set the tone for the whole fund.spglobal.com
• One sector out of eleven in the S&P 500, so it tracks ad budgets, subscriptions and phone bills rather than the broad market.spglobal.com
• FCOM and VOX sit within a penny of the same fee, so the real choice is index breadth: XLC stops at the S&P 500. Distributions come quarterly.ssga.com

Full FCOM profile⁠

Full XLC profile⁠