Two ETFs: Two different themes

Article Excerpt

This month we look at an ETF that aims to track the newly reclassified S&P/MSCI “communication services” sector. The other seeks to find dividend-paying stocks that will thrive in a rising interest-rate environment. COMMUNICATION SERVICES SELECT SECTOR SPDR ETF $46.30 (New York symbol XLC) tracks the newly reclassified “communication services” sector: In its three-month lifespan, the ETF has already attracted $2.6 billion in assets under management. On September 28, 2018, index creators S&P and MSCI announced their new industry group reclassifications. In short, the telecommunication services sector expands and is now called the communication services sector. As a result, the new sector includes Facebook and Alphabet (the parent company of Google), along with many other companies currently in the information technology sector. Meanwhile, online marketplaces like eBay and Alibaba—previously classified as information technology—will join Amazon in consumer discretionary. This new ETF’s MER is 0.13%. It holds 26 stocks; the top 10 represent a big 72% of the assets. They include Alphabet (23.2%), Facebook (17.5%), Walt Disney (4.7%), Electronic Arts…

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