Indexology^® Blog

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Revisions to the Global Industry Classification Standard (GICS^®) structure were implemented at the March S&P/ASX rebalance. The changes affect the GICS structure at all levels and involve a number of intra- and inter-sector changes for companies within the S&P/ASX 200 and S&P/ASX 300.

Inter-sector changes are the reclassification of constituents to a different sector under the new GICS structure, while intra-sector changes refer to firms being reclassified (i.e., sub-industry updates) within their current sector.

Inter-Sector Changes

All of the companies within the S&P/ASX 200 and S&P/ASX 300 that will change sector are part of the discontinued Data Processing & Outsourced Services sub-industry within the Information Technology sector. Companies within this sub-industry will either be reclassified to the new Transaction & Payment Processing Services sub-industry within the Financials sector or moved to the Industrials sector under the new Data Processing & Outsourced Services sub-industry.

This change has resulted in five companies within the S&P/ASX 300 changing sector, with three of those companies being constituents of the S&P/ASX 200. Collectively, these companies make up less than 0.90% of weight in each index.

Intra-Sector Changes

GICS changes that were implemented in the Consumer Discretionary sector redefined sub-industries based on the nature of goods sold. The discontinuation of the Internet & Direct Marketing Retail Subindustry, as well as the merger of General Merchandise Stores and Department Stores into a new sub-industry called Broadline Retail, account for several reclassifications.

The Real Estate sector was affected by an increased granularity of company classifications within real estate investment trusts (REITs). In particular, self-storage, data centers, telecom towers and timber REITs were given their own categories, while further granularity was also added to residential REITs.

Meanwhile in the Financials sector, the Thrifts & Mortgage Finance sub-industry (within the Banks industry group) has been discontinued. Mortgage finance companies mainly offer mortgage finance-related products & services and generates fee-based revenue, distinct from banks. These companies will move into the Financial Services industry group as a new sub-industry—Commercial & Residential Mortgage Finance.

Another change worth noting is that the Trucking sub-industry within Transportation was discontinued, with new sub-industries Ground Transportation and Passenger Ground Transportation being created.

In total, there are 13 companies within the S&P/ASX 300 and seven within the S&P/ASX 200 that were reclassified into a different sub-industry, amounting to a collective index weight of 3.22% and 3.16%, respectively.

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