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Real Estate to Become Its Own S&P 500 Sector

Moving real estate out of financials and into its own sector should increase its importance in investor portfolios.

By Natalie Dolce | nataliedolce | | Updated on July 19, 2016

housing The world according to the Global Industry Classification Standard for stocks is changing, and investors need to understand the new world order. It starts with the elevated importance of real estate, according to a recent article from GlobeSt.com sister publication, ALM’s ThinkAdvisor.com. Growth has been so phenomenal that S&P Dow Jones Indices and MSCI, which developed and oversee the GICS, are moving real estate out of the financial sector space that it has historically occupied and creating a separate standalone sector for real estate, effective Sept. 19, the article says. “The real estate sector will have more prominence,” explained David Blitzer , managing director and chairman of the index committee of S&P Dow Jones Indices , during an educational S&P webinar. The new real estate sector will include 28 real estate development stocks and REITs and account for 3.5% of the weighting in the S&P 500. As of June 30, 2016, the floating adjusted market cap was $588 billion. Mortgage Reits will remain a part of the financial sector. To learn more, read the full article on the subject at ThinkAdvisor.com.

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