Effective September 24, 2018, S&P Dow Jones Indices and Global Industry Classification Standard (GICS) created a new sector for technology, media, and telecommunication companies. S&P Global Ratings and MSCI oversee the Global Industry Classification Standard (GICS). These are the first changes by MSCI and S&P on how technology companies are categorized in the S&P 500 since 1999. It's only the second sector addition since 1999 and is a recognition of how consolidation has melded the telecom, media, and internet industries together.
Standard & Poors renamed and expanded the Telecom sector to Communications Services of the S&P 500 index. S&P added a few stocks from the Consumer Discretionary and Technology sectors. The decision to reclassify certain companies was intended to rebalance the S&P 500 in order to mitigate the disproportionate influence of the Tech sector.
Verizon (VZ), AT&T (T) and CenturyLink (CTL) were the only three stocks remaining in the Telecom sector. With the reclassification, Facebook and Alphabet, combined, comprise up to 45% of the new Communication Services sector weighting.
The new Communications Services sector consists of the following companies:
Activision Blizzard (ATVI)
Alphabet (GOOGL)
AT&T (T)
CBS (CBS)
CenturyLink (CTL)
Charter Communications (CHTR)
Comcast (CMCSA)
Discovery Communications (DISCA)
DISH Network (DISH)
Electronic Arts (EA)
Facebook (FB)
IPG Photonics (IPGP)
Netflix (NFLX)
News Corp (NWSA)
Omnicom (OMC)
Take-Two Interactive (TTWO)
TripAdvisor (TRIP)
Twenty-First Century Fox (FOXA)
Twitter (TWTR)
Verizon (VZ)
Viacom (VIAB)
Walt Disney (DIS)
In addition, eBay (EBAY) moved from the Technology sector to the Consumer Discretionary sector to join Amazon (AMZN) and other e-commerce stocks.
The Communications Services will now be the largest sector of the S&P 500 representing approximately 10% of the index’s capitalization.
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