Communication ETFs fall to 18-month lows ahead of big tech earnings – Seeking Alpha

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Ahead of quarterly results from industry heavyweights Alphabet (GOOG) (GOOGL) and Meta Platforms (FB), communication and telecom exchange traded funds touched 18-month trading lows on Monday. The group has seen significant selling so far this year, with the space representing the worst-performing market segment of the 11 S&P 500 sectors in 2022.

Falling to an 18-month trading low on Monday are the Vanguard Communication Services ETF (NYSEARCA:VOX), Communication Services Select Sector SPDR Fund (NYSEARCA:XLC), Fidelity MSCI Communication Services Index ETF (NYSEARCA:FCOM), and the iShares Global Telecom ETF (NYSEARCA:IXP).

VOX touched 105.80 a share, while XLC, FCOM, and IYZ dipped to 60.82, 40.09, and 27.71 a share, respectively. The four funds havent traded this low since early Nov. of 2020.

Big tech is on deck to report Q1 earnings this week, with headline names like Alphabet (GOOG) (GOOGL) and Meta Platforms (FB) set to report on Tuesday and Wednesday. Both GOOG and FB will have major implications on the beaten-down XLC, VOX, FCOM, and IXP. The two stocks represent between 34%-43% of the above four ETFs.

XLC has a combined 42.7% weighting: GOOG 22.82% & FB 19.88%.

FCOM has a combined 36.78% weighting: GOOG 23.25% & FB 13.53%.

VOX has a combined 36.31% weighting: GOOG 22.98% & FB 13.33%.

IXP has a combined 34.40% weighting: GOOG 22.45% & FB 11.95%.

See a complete schedule of big tech earnings this week along with all other exchange traded funds that may be affected by the reports.

Head-to-Head Comparison

While all four funds offer investors exposure to the communications/telecom sector, they do have many important differences. The differentiation comes in areas like assets under management, expense ratios, number of holdings and performances.

AUM: XLC leads the space with $10.64B under its belt, while VOX comes in second at $3.41B. FCOM and IXP are the smaller funds with $669.78M and $205.01M assets under management.

Cost: FCOM is the most cost-effective fund with an expense ratio of 0.08%. Not far off are XLC and VOX with 0.10% expense ratios. IXP on the other hand, is the priciest of the group with a 0.43% cost ratio.

Holdings: All four funds' top two holdings are GOOG and FB, but FCOM and VOX offer the broadest sector exposure with 114 holdings and 110 holdings. IXP is also diverse with 98 holdings compared to the heavily concentrated 28 holdings of XLC.

Performance: All four funds have provided roughly the same returns in 2022 of -21%, but over a three-year period XLC is +24.2%, VOX is +20.9%, FCOM is +19.8%, and IXP is +13.5%.

For greater insight into how these four funds have matched up against each other, see Seeking Alphas quantitative and fundamental analysis of each ETF.

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Communication ETFs fall to 18-month lows ahead of big tech earnings - Seeking Alpha