Written by Lance Roberts, Clarity Financial
I noted a couple of weeks ago the S&P 500 was reshuffling the makeup of the sector weightings.
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To wit:
At the end of this month, there will be significant changes to the makeup of the S&P 500 index as a new communications sector (XLC) is added to the mix. After the switch 3 of the 4 original “FANG” (FB, NFLX, & GOOG) companies will be in that group. These changes will have wide-reaching effects as the traditionally defensive telecommunications sector will now be the new “momo” sector and the technology sector will lose some of its “juice.”
The new sector weightings will be as follows (chart courtesy of LPL.
Just for your reference here are the top-10 holdings of the ETF’s currently which will change on September 21st. I have highlighted the 4-FANG stocks.
However, here is a full list of the stocks to be reclassified.
As noted, the telecommunications sector is likely to become much more volatile. Furthermore, if you are benchmarking your portfolio, you will need to make sector weighting changes as well.
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