Investing Port

The Fidelity MSCI Communication Services Index ETF (FCOM) tracks an index of well-known stocks like Facebook, Twitter, Netflix, and Google-parent Alphabet Inc. As of June 2020, FCOM owned about 100 stocks, including small caps, making it a better-diversified option than the Communications Services Select Sector SPDR (XLC). FCOM may appeal to investors looking to tilt their portfolio toward volatile companies once lumped in with technology firms. In 2018, several well-known tech stocks were reclassified as communications services as part of a massive overhaul of the Global Industry Classification Standard, or GICS. The resulting changes implemented by index providers like MSCI and S&P had a ripple effect throughout ETFs. Technology ETFs sold off well-known companies like Facebook, which were picked up by ‘communications services’ funds, which now look nothing like the old telecommunications funds that were dominated by stocks like AT&T and Verizon. FCOM is competitively priced when compared with the Vanguard Communication Services ETF (VOX), which is nearly identical, though traders might prefer the size and liquidity of XLC.