The S&P 500 Gets Modern

S&P is making some important classification changes to the S&P 500, and I think it’s long overdue. I’ve never liked the Telecom sector as a stand-alone sector. The good news is that Telecom is being renamed Communication Services. They’re going to take the old Telecom stocks and add a bunch of “new media” stocks like Facebook, Alphabet, Comcast and Netflix.

I don’t know exactly how I’d classify a company like Facebook, but I suppose Communications is pretty good.

They’re also updating the Internet & Direct Marketing Retail Sub-Industry to include all “online marketplaces.” This will include companies like Alibaba and eBay.

This is going to blow a big hole in the Tech Sector (formally, the Information Technology). S&P is also going to take companies in the Internet Software & Services Sub-Industry and put then in a new Internet Services & Infrastructure Sub-Industry which will be under the IT Services Industry.

They’re going to take some companies currently labeled as Internet Software & Services and reclassify them as Application Software. This will ditch the current Internet Software & Services Industry and Sub-Industry. Good.

The new structure will have 11 Sectors, 24 Industry Groups, 69 Industries and 158 Sub-Industries.

Posted by on January 16th, 2018 at 1:47 pm


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