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State Street launches communication services ETF

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State Street Global Advisors has launched the Communication Services Select Sector SPDR Fund (XLC).

The fund is designed to provide exposure to the new Communication Services sector, unveiled by S&P Dow Jones Indices and MSCI Inc, following the annual review of the Global Industry Classification Standard (GICS) structure in November 2017.
 
The firm writes that the reclassification of the GICS structure will transform the existing Telecommunications Services sector, expanding it to include selected companies from the Information Technology and Consumer Discretionary sectors. It will be renamed Communication Services effective September 21, 2018.
 
In addition to the fund launch of XLC, in accordance with the constituent changes under the GICS reclassification for the existing Information Technology and Consumer Discretionary sectors, State Street Global Advisors is announcing that it will rebalance the Technology Select Sector SPDR Fund (XLK) and the Consumer Discretionary Select Sector SPDR Fund (XLY) to reflect the underlying index changes, such changes to be effective after the close on September 21, 2018.
 
“State Street Global Advisors always seeks to provide investors with the tools necessary to implement sector views across the entire GICS framework,” says Noel Archard, global head of product for State Street ETFs. “The launch of XLC allows our clients immediate access to this new investment opportunity that will represent roughly 10 percent of the S&P 500 Index in terms of market capitalisation.”
 
With the launch of XLC, State Street Global Advisors’ suite of US-listed sector-based SPDR ETF solutions includes 33 funds with USD168 billion in assets as of June 12, 2018.
 
“Existing shareholders of XLK and XLY do not need to take action at this time; however, investors will likely want to analyse their sector positions. Given our heritage as a creator of the World’s first ETFs, and the breadth of our insights and data, we are prepared to help investors navigate these changes by leveraging our capabilities as a steward of USD2.73 trillion in assets under management and 25 years of managing ETFs,” says Archard.

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