"The Magnificent Seven stocks represent 35% to 40% of the S&P 500, creating historically high concentration risk for investors heading into 2026. While tech exposure remains essential, betting on seven mega-cap names leaves portfolios vulnerable to sector-specific shocks and valuation compression. Fidelity MSCI Communication Services Index ETF ( NYSEARCA:FCOM) offers a compelling alternative: pure-play communications sector exposure including the tech giants investors want, plus infrastructure companies they're overlooking."
"FCOM provides access to the communications sector's growth engines while spreading risk across 99 holdings instead of seven stocks. Meta Platforms ( NASDAQ:META) represents 23.5% of the portfolio and Alphabet ( NASDAQ:GOOGL) (combined GOOGL and GOOG shares) accounts for 23.3%, delivering the digital advertising and platform exposure investors seek. The ETF's real differentiation lies in its 13.4% allocation to traditional communications infrastructure: Verizon ( NYSE:VZ) (3.9%), AT&T ( NYSE:T) (3.8%), Comcast ( NASDAQ:CMCSA) (3.0%), and T-Mobile ( NASDAQ:TMUS) (2.7%)."
Magnificent Seven stocks constitute roughly 35–40% of the S&P 500, producing historically high concentration risk heading into 2026. Fidelity MSCI Communication Services Index ETF (FCOM) offers diversified communications-sector exposure across 99 holdings, combining large tech platform positions—Meta (23.5%) and Alphabet (23.3%)—with a 13.4% allocation to traditional communications infrastructure such as Verizon, AT&T, Comcast, and T-Mobile. Infrastructure holdings provide substantially higher dividend yields (Comcast and Verizon ~4.7%) versus major tech yields (Meta ~0.31%). FCOM carries a 0.084% expense ratio, $1.9 billion in assets, a 12-year track record since October 2013, and a ten-year total return near 240%. Meta generated $189.5 billion in trailing revenue with a 30.9% profit margin and operating margin exceeding 40%.
Read at 24/7 Wall St.
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