Today, September 1, 2016, marks the first shake-up of the S&P 500 Index in nearly two decades.
For example, the stocks of Real Estate Investment Trusts fall under their own index now.
Although this is a major move for the market and investors, this doesn’t change the intrinsic value of any share of stock, an article in Bloomberg by Anna-Louise Jackson said.
Here’s what it does impact, according to the article:
The action matters for investors, particularly owners of exchange-traded funds tracking financial firms. Sponsors such as State Street Corp. plan a hodgepodge of machinations to accommodate the division, another example of how much indexes matter to money managers as the industry evolves.
Buried inside the financial section of the S&P 500 are 28 REITs, the subjects of the current rearrangement. With more than $580 billion in market value, those stocks are already bigger than the telecommunications and mining sectors, and will become their own top-level industry. As a result, any ETF sponsor that bases its offering on the S&P Dow Jones Indices and MSCI Inc. standards must take steps to align with the new makeup.