#307 Sector Reclassification – Why it Matters

Communication Services Sector

Rarely does the S&P come up with new sectors. Large sectors such as technology and banking seem to stand the test of time. This week a new sector will be coming out. It’s more impactful than it might appear because of the sheer numbers. The new sector will be called the communications services sector. Why is this important? It’s not composed of new companies. It’s taking companies from other sectors and reclassifying them. In the ever-changing world of technology, companies that used to only be tech companies can now firmly compete with consumer companies.

The Impact

The new communications service sector will include companies from media, information technology and traditional telecommunications sectors. This will impact more than 2,100 companies and over 4 trillion dollars in market cap. This will not happen overnight. It will start on the 28th of this month with the rebalancing of the S&P sectors and throughout the rest of the year with MSCI and global indexes. If you currently hold a sector ETF or mutual fund it might be good to consult with us to see if this change could affect your holdings.

 

Trey Booth, CFA®, AIF®
Senior Vice President
Wealth Consultant
Email Trey Booth here

 

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

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#308 Big News North of the Border #306 Interest Rates Rising?