Comcast’s Spinoff Highlights a Growing Divide in Telecom ETFs The spinoff has investors taking a fresh look at the sector, now split between old-school telecom and the AI-heavy giants crowding into the space. Sign up for exclusive news and analysis of the rapidly evolving ETF landscape. We’ll take Door No. 3. The Comcast spinoff made waves last week, but it’s also creating new interest in exchange-traded funds that gain exposure to the telecommunications sector. The funds generally track companies like landline and mobile phone carriers, as well as mobile phone manufacturers, but AI companies are quickly splitting the segment in two. Behind Door No. 1 are traditional, mid-size telecom companies like Comcast and AT&T, which are struggling from good, old-fashioned competition. Behind Door No. 2 is the large-cap, new wave of companies like Meta, Alphabet and SpaceX, spending heavily on their AI buildout and often more volatile. It’s creating an interesting investing dynamic for advisors looking to leverage telecom. “Meta and Alphabet are increasingly being connected to the AI trade, in or out of favor, whereas much of the rest of telecom services is slower growth,” said Todd Rosenbluth, Vettafi head of research. The Devil Is in the Details In sector ETFs, fund performance largely comes down to portfolio composition. The State Street Communication Services Select Sector SPDR ETF (XLC), for instance, is down more than 6% this year, with about 40% of the fund allocated to Meta and Alphabet, both of which have slid amid concerns about AI spending. By contrast, the State Street SPDR S&P Telecom ETF (XTL), which holds neither Meta nor Alphabet and instead tracks more traditional telecom services, is up almost 48% over the same period. The largest communications ETFs, according to Morningstar data, are: - The State Street Communication Services Select Sector SPDR ETF