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Changes made to S&P 500 Tech Index and how South Africans can access it

The S&P Dow Jones Indices and MSCI have announced some major changes to the Global Industry Classification Standard structure which have impacted on the S&P 500 Information Technology sector.

Six companies will leave the current S&P Information Technology sector to join the newly formed Communication Services sector.

These companies are: Activision Blizzard, Alphabet (Google), Electronic Arts, Facebook, Take Two Interactive Software and Twitter.

One company, eBay, will leave the Information Technology sector to join the Consumer Discretionary sector.

The S&P Information Technology sector will therefore consist of 64 companies and be 21% of the S&P 500 index after this event.

Top 10 holdings:

Before:

Name WEIGHT

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APPLE INC 17.2%
MICROSOFT CORP 13.2%
FACEBOOK CLASS A INC 6.5%
ALPHABET INC CLASS C 5.7%
ALPHABET INC CLASS A 5.6%
VISA INC CLASS A 4.0%
INTEL CORPORATION CORP 3.5%
CISCO SYSTEMS INC 3.4%
MASTERCARD INC CLASS A 3.0%
NVIDIA CORP 2.6%

New:

Names WEIGHT

APPLE INC 21.5%
MICROSOFT CORP 16.6%
VISA INC CLASS A 5.0%
INTEL CORPORATION CORP 4.3%
CISCO SYSTEMS INC 4.3%
MASTERCARD INC CLASS A 3.8%
NVIDIA CORP 3.3%
ORACLE CORP 2.8%
ADOBE SYSTEM INC 2.5%
INTERNATIONAL BUSINESS MACHINES 2.4%

South Africans can access these shares  via the STANLIB S&P500 Info Tech Index Feeder ETF which is a rand denominated fund that trades on the JSE.

The Stanlib ETF is trading at R 5.80 and is off a yearly high of R 7.34. It offers a good entry point into tech stocks for investors who are not moving money offshore and want to hold shares like Apple and Microsoft.

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