Published on 17 Mar 2023 on Zacks via Yahoo Finance

GICS Sector Changes: Impact on Sector ETFs

After the close on 17 March, S&P Dow Jones and MSCI will reclassify the Global Industry Classification Standard (GICS) structure. This will influence 14 S&P 500 companies. The current GICS structure includes 11 sectors, which will remain unchanged.

The reclassification of firms will occur across five GICS sectors. These are consumer discretionary, consumer staples, financials, industrials, and information technology. The financials and information technology sectors will see the largest impact. UBS estimates financials weight in the S&P 500 will increase by 2.7% and information technology will decline by 3.2%.

Moreover, food, household, and personal care products firms like Target TGT, Dollar General DG and Dollar Tree DLTR will leave the Consumer Discretionary Select Sector SPDR ETF XLY and join the Consumer Staples Select Sector SPDR ETF XLP The new discount stores companies will constitute about 6.5% of the new staples sector, per the UBS article.