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How is technology changing the structure of
GICS and the S&P 500 index?

How is technology impacting
the structure of the S&P 500?

Keep it brief

  • Companies within the IT, telecommunication and consumer discretionary sectors have evolved to meet consumer demand.
  • This evolution is impacting the how index providers like S&P structure their indices.
  • iShares explores how these changes will impact one of the world’s best known indices, the S&P 500.

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How do these changes affect companies in the S&P 500?
Which S&P 500 companies are moving?
What are the implications for investors?

As companies evolve, the way we
classify them also needs to evolve

Changes in technology and company acquisitions have driven an evolution in the mode in which people communicate and access entertainment content and information.

Financial investment quote

The internet began as a technological approach to sharing information; it has become the way many businesses operate... The lines among media, communications, and content are blurred. It is time to acknowledge this convergence and the overlapping services these companies provide.

Financial investment quote

David Blitzer, Chairman of the Index Committee
at S&P Dow Jones Indices

How is this evolution impacting the components of indices like the S&P 500?

  • In 1999, MSCI and S&P developed the Global Industry Classification Standard (GICS©), creating a universal standard for categorizing companies into sectors and industries.
  • As part of the 2017 annual review, it was decided that the GICS structure needed to change in order to reflect how companies in the communication sector have evolved.
  • The key change was that to replace the Telecommunication sector with a new Communication Services sector.
  • The changes will be implemented in S&P Dow Jones Indices as of the close on September 21, 2018 to coincide with the annual rebalance, and in MSCI equity indexes as part of the November 2018 Semi-Annual Index Review.

Read on to learn how these changes will impact the companies and sectors in the S&P 500.

How do these changes affect companies in the S&P 500?

GICS changes will affect approximately 11% of the S&P 500

1

The Telecommunication
Services sector will be renamed
and rebranded as the
Communication Services sector

2

6 companies will move from
the Information Technology
sector to the new
Communication Services sector

3

1 company will move from
the Information Technology
sector to the Consumer
Discretionary sector

4

13 companies will move from
the Consumer Discretionary
sector to the new
Communication Services sector

Source: BlackRock, S&P Dow Jones Indices and MSCI as of July 2018. Reclassifications subject to revision.

Which S&P 500 companies are moving?

Click the ? to see which companies are moving.
BEFORE
21 September 2018
Information Technology
Information Technology
0
26%
companies
of the S&P 500
Telecommunication Services
Telecommunication Services
3
2%
companies
of the S&P 500
Consumer Discretionary
Consumer Discretionary
76
13%
companies
of the S&P 500
AFTER
21 September 2018
Information Technology
Information Technology
64
20%
companies
of the S&P 500
Telecommunication Services
communication Services
22
11%
companies
of the S&P 500
Consumer Discretionary
Consumer Discretionary
65
10%
companies
of the S&P 500
6 Companies
?
3 Companies
?
13 Companies
?
1 Company
?
X
  • Twitter
  • Alphabet
  • Facebook
  • Take-two interactive software
  • Activision Blizzard
  • Electronic Arts
  • AT&T
  • Centurylink
  • Verizon Communications
  • Discovery Communications
  • Walt Disney
  • CBS Corporation
  • Viacom
  • Netflix
  • IPG
  • News Corp
  • Tripadvisor
  • DISH Network Corp
  • Charter Communications
  • Omicom Group
  • 21st Century Fox
  • Ebay

Not all companies that are expected to move are listed here. For more information, visit us.spindices.com. Reclassifications subject to revision. Source: BlackRock, S&P Dow Jones Indices and MSCI as of July 2018.

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What are the implications for investors?

Some of the largest companies in the S&P 500 will be impacted by these changes, so what options are available to investors?
Swipe to see more
Implications for investors
Options available to investors
Strategy
Client Impact

Investing in the S&P 500 with iShares

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