After this Friday’s close the S&P will be making quarterly market cap rebalancing changes to their major indices, including the S&P500, Midcap 400, and SmallCap600. This means that any tracking ETFs (such as $SPY, or $MDY) must buy or sell shares to align with the updated index composition. There are four changes being made to the S&P500 that come into effect on Monday 24th:

Courtesy of Optuma

Following the changes, Consumer Discretionary will add a net market cap of $92 billion, whilst Materials – already the smallest sector in the index representing only 2% – will lose over $11 billion. Here’s the current market cap sector breakdown, with Technology (($14.6 Trillion, 30%) accounting for twice as much as the next sector (Financials, 14%):

Courtesy of Optuma

Following the changes, Consumer Discretionary will add a net market cap of $92 billion, whilst Materials – already the smallest sector in the index representing only 2% – will lose over $11 billion. Here’s the current market cap sector breakdown, with Technology (($14.6 Trillion, 30%) accounting for twice as much as the next sector (Financials, 14%):

Courtesy of Optuma

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