IMPORTANT Upcoming GICS Changes

Announcements
1

We have reviewed the changes that S&P is making to the GICS system. S&P will be making these changes on September 30, 2018.

The following codes will be retired:

GICS Code:Name:P123 Code
2540:Media:MEDIA
254010:Media:
25401010:Advertising:ADVERTISING
25401020:Broadcasting:BROADCASTING
25401025:Cable & Satellite:CABLETV
25401030:Movies & Entertainment:CINEMA
25401040:Publishing:BOOKS
451010:Internet Software & Services:INTERNET
45101010:Internet Software & Services:
45103030:Home Entertainment Software:SOFTWENT

Sector 50 is changing its name from Telecommunications Services to Communication Services and its Portfolio123 code from TELECOM to COMMSVCE.

The following new codes will be implemented:

GICS Code:Name:P123 Code
45102030:Internet Services & Infrastructure:TECHINFRA
50:Communication Services:COMMSVCE
5010:Telecommunication Services:TELECOM
5020:Media & Entertainment:MEDIAENT
502010:Media:MEDIA
50201010:Advertising:ADVERTISING
50201020:Broadcasting:BROADCASTING
50201030:Cable & Satellite:CABLETV
50201040:Publishing:BOOKS
502020:Entertainment:ENTERTAIN
50202010:Movies & Entertainment:CINEMA
50202020:Interactive Home Entertainment:GAMES
502030:Interactive Media & Services:SOCIAL

As part of this change, a large number of companies are going to be reclassified. We are unsure how much comparability there will be between old and new GICS codes. We suspect that some will be more comparable than others. CABLETV is probably going to be very similar, but GAMES is a new animal compared to SOFTWENT.

Users should expect that the reused P123 codes will only be true going forward. BOOKS, for example, will reflect GICS code 50201040 after September 30, 2018, but it will be empty prior. To get all those that were in that classification beforehand use the GICS function, which is point in time, to include the defunct codes:

GICS(25401040,50201040)

Also, we are taking this opportunity to make a few corrections:

GICS Code:Name:Old P123 Code:New P123 Code
20106010:Construction Machinery & Heavy Trucks:MACHINERYFARM:CONSTRUCTMACHINE
20106015:Agricultural & Farm Machinery::FARMMACHINE
55105010:Independent Power Producers & Energy Traders::UTILTRADE
55105020:Renewable Electricity::UTILRENEW
60101030:Hotel & Resort REITs::REITHOT
60101050:Health Care REITS::REITHC

We do not foresee any problems with these changes, though if you were using MACHINERYFARM then you’ll probably want to change the code in your rules.

As for individual companies, this change is the same as any other industry change: It will be part of the industry that it was in point in time during tests. On the whole, this could have the effect of large turnovers in the immediate future as comparisons for many companies will change, as will aggregate functions.

The documentation for GICS, Sector, Subsector, Industry and Subindustry has already been updated with these changes.

2

Paul - I just found a problem in the “Help - Full description for the GICS classification”. Some of the new P123 Codes were not listed properly. (See attachment).

P123_Codes.gif
P123_Codes.gif737×450 50.2 KB

3

The documented P123 codes have been updated in the reference to reflect the changes which will be applied this Sunday.

The following action will also be taken on Portfolio123 GICS indices to further ease the transition:
The GICS indices for the new Advertising, Broadcasting, Cable & Satellite, Publishing, and Movies & Entertainment sub-industries will be back-filled from their discontinued counterpart.
The GICS index for the new Media industry will be derived from the old Media sub-sector and the old Movies & Entertainment sub-industry index.
For USA Media, the daily performance will be approximated using the formula [font=courier new](3 * <2540> - 1 * <25401030>) / 2[/font].
For CAN Media, the daily performance will be approximated using this formula [font=courier new](11 * <2540> - 1 * <25401030>) / 10[/font].

4

According to the changes in today’s updates, it now looks like there are only five industries in the new sector:
Diversified Telecommunications Services
Entertainment (most of these companies used to be in the consumer discretionary sector, but a few were in information technology, I believe)
Interactive Media & Services (a lot of tech companies, including Alphabet and Facebook)
Media (used to be in consumer discretionary)
Wireless Telecommunications Services
One startling fact is that Netflix has, inexplicably, remained in the consumer discretionary sector, in the internet & direct marketing retail industry. This was not supposed to happen. Is this a data glitch?
Also the label for the sector is now “Telecommunications Services.” Shouldn’t it be “Communications Services”? And ditto for the “telecommunications” in the industry names?

5

In addition to what YuvalTaylor has mentioned, I see the following issues:

There are 20 stocks listed under the “discontinued” subindustry:
45101010 Internet Software & Services

And there are no stocks in the newly added subindustry:
45102030 Internet Services & Infrastructure

I would appreciate knowing if GICS has changed their minds on some of the restructuring or hasn’t fully implemented the changes yet.

Thanks
Steve

6

Hi Steve,
45102030 Internet Services & Infrastructure should now be populated. There are still some stocks showing up in the “discontinued” categories because that classification is the last known classification according to our data provider. We’ll look into these and see if they are in error or just out of date.

thanks
ted

7

Thanks

8

Is there a problem with Sector=Telecom My screener report is not generating any stocks from this sector?

9

Telecom is no longer a sector. Try subsector.

Subsector = TELECOM