Why I Think XLY And XLC Stand Out Over Tech In 2026
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Kenio Fontes1.72K FollowersFollow5ShareSavePlay(10min)CommentsSummaryI see the State Street Consumer Discretionary ETF, XLY, as a cautious buy for 2026, with potential upside if key holdings rebound.XLY's performance hinges on macroeconomic improvements, falling rates, and possible multiple re-ratings for companies like Nike and Amazon.I prefer the State Street Communication Services ETF, XLC, over the Technology ETF, XLK, due to lower drawdown risk and compelling catalysts like sector consolidation.XLC's top holdings, Meta and Alphabet, offer attractive valuations and growth triggers, while the ETF balances growth and defensive names. Dmytro Varavin/iStock via Getty Images In my outlook for the market in 2026 (you can check it here), my stance was optimistic, but cautious at the same time. Part of this is related to the market's high dependence on a fewThis article was written byKenio Fontes1.72K FollowersFollowEquity Research Analyst with a broad career in the financial market, covered both Brazilian and global stocks. As a value investor, my analysis is primarily fundamental, focusing on identifying undervalued stocks with growth potential. Feel free to reach out for collaborations or to connect!Analyst’s Disclosure:I/we have a beneficial long position in the shares of AMZN, GOOGL, AMD, NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.