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CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider.
CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX, or any of our other products work and whether you can afford to take the high risk of losing your money.
As of the market close on September 28, MSCI will make a big change to its GICS classification. Telecommunication Services changes its name to Communication Services and will be moved into the Cyclical sector index. Media companies will move from the Consumer Discretionary sector to the new Media & Entertainment industry group under the new Communication Services sector, and Internet Services in the Information Technology sector will also move to the Media & Entertainment industry group.
Lastly, e-commerce companies will move from Information Technology to Consumer Discretionary. The slide from MSCI below gives the overview.
The key points are:
● MSCI now classifies Alphabet (Google) and Facebook as media companies. This increases the probability that US regulators will do the same.
● Ebay, Alibaba, etc. will go into retailing, making the category more streamlined.
● Information Technology becomes much less software-oriented. Software, as we noted last week, has carried its performance for a decade as we wrote about last week. This means that IT will "go back to the old days” and be more concentrated on semiconductors and hardware.
● The Media & Entertainment industry group will become the dominant index weight in the new Communication Services sector. MSCI has chosen to change it to become cyclical but based on our observations, companies such as Google, Facebook, Baidu, Comcast, Disney, and Netflix do not behave in a strictly cyclical fashion as many of these services are “utility-like” for many families and businesses. So here we disagree with MSCI, but overall the new classification is a good change.
Source: MSCI
This is roughly the new weight composition in the new Communication Services sector:
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