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INDEX RESHUFFLING - COMING SOON!

September 19, 2018
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INDEX RESHUFFLING - COMING SOON!

by Keith Day

Major changes are coming to 3 popular sectors of the market. Historically small changes to broad market indices happen relatively often as result of mergers, buyouts, growth/failure of companies. However, broad adjustments to indices particularly sector indices are very rare.

SO, WHAT IS GOING TO HAPPEN?

The sector currently referred to as Telecommunications is expanding and being renamed as Communication Services. Concurrently the Information Technology and Consumer Discretionary sectors will be contracting. Some big names making moves include many popular stocks such as Google, Facebook, Disney, Netflix, Twitter, and eBay, just to name a few.

WHEN WILL THE CHANGES TAKE EFFECT?

Sept 28, 2018, however some funds have already begun adjusting their holdings to reflect the new sector holdings.

WHAT DOES THIS MEAN FOR ME?

For most accounts these changes will have little to no impact.

Accounts holding affected funds might notice a bit more volatility, a possible increase in yearend capital gain distributions, and proportional shifts in the sector asset allocations.

For accounts holding the individual stocks nothing changes other than the sector name assigned to the stock. So, while your sector balance will shift you still have the same portfolio as before. Thus, the impact is minimal, aside from potentially some increased short-term volatility.

WHAT DO I NEED TO DO?

NOTHING! Your advisor at Russell Capital Management is aware of the changes and will be monitoring your portfolio for any possible adjustments that need made to your account and will do so if needed.