Are you an investor in Apple or Microsoft stocks? If so, then the recent changes to the Global Industry Classification Standard (GICS) may have piqued your interest. The departure from GICS has left many shareholders wondering what it means for their portfolios and whether they should make any strategic moves. In this blog post, we’ll explore the implications of this shift and help you understand how it will impact your investments in these tech giants. So buckle up as we dive into the world of GICS and its potential effects on your financial future!
What is GICS?
The Departure from GICS
In early 2018, Apple and Microsoft shareholders were dealt a blow when it was announced that the Global Industry Classification Standard (GICS) would be changing. For years, these two companies had been considered part of the technology sector. But with the new GICS structure, they would be moved to the newly created communications sector.
This change caused some consternation among investors, who were worried about how it would affect the share prices of these companies. After all, the technology sector is generally seen as being more volatile than the communications sector.
But what exactly is GICS? And why does this change matter?
GICS is a system used by investment firms to categorize companies by industry. It was created in 1999 by Standard & Poor’s and MSCI (formerly Morgan Stanley Capital International). The idea behind it was to provide a more accurate and up-to-date way of classifying companies than the existing system, which was based on the industry codes used in the SEC’s Edgar database.
The GICS system has four levels: sectors, industries, sub-industries, and groups. Apple and Microsoft are both currently classified as members of the information technology sector. Within that sector, they are further classified as members of the software sub-industry.
The changes that are being made to GICS will create a new communications sector, which will include companies that provide telecommunication services or equipment
What Does the Departure from GICS Mean for Apple and Microsoft Shareholders?
The Departure from GICS is a big deal for shareholders of Apple and Microsoft. Here’s why:
The Global Industry Classification Standard (GICS) is a system that categorizes companies by industry. It’s used by investors to track companies and make investment decisions.
Apple and Microsoft have been members of the GICS since it was created in 1999. But on September 28, 2018, they announced they were leaving the system.
The departure from GICS is a major event for these companies and their shareholders. Here’s what you need to know about it.
Why are Apple and Microsoft leaving GICS?
There are two main reasons why Apple and Microsoft are leaving GICS.
First, they don’t think the system accurately reflects their businesses anymore. Apple has grown beyond its core product, the iPhone, to include services like iCloud and Apple Music. And Microsoft has moved beyond its traditional Windows software business into areas like cloud computing and artificial intelligence.
Second, they want more control over how they’re categorized. By leaving GICS, they can choose which industries they want to be associated with. For example, Apple might choose to be listed as a consumer company instead of a technology company. And Microsoft might choose to be seen as a business software company rather than a consumer tech company.
What does this mean for shareholders?
This move could have big implications for shareholders of both companies. Here are three things to watch
What are the Implications of the Departure?
As the world’s largest technology company, Apple’s departure from the Global Industry Classification Standard (GICS) is a big deal. The GICS is a system used by investors to track stocks and industries. It’s also used by index providers like S&P Dow Jones Indices and MSCI.
Apple will now be classified as a Communication Services company, rather than a Technology company. This change will take effect on September 20, 2018.
What does this mean for Apple shareholders?
Some analysts believe that this move could be positive for Apple, as it would be grouped with other companies that are growing quickly, such as Facebook and Google. Others worry that it could make it harder to compare Apple to its peers in the technology sector.
What does this mean for Microsoft shareholders?
Microsoft will now be the only technology company in the Dow Jones Industrial Average (DJIA). Some believe that this could lead to increased investor interest in Microsoft, as it would be seen as a more stable investment than some of its high-flying tech peers. Others worry that Microsoft could face more pressure to perform, as it would no longer have the benefit of being compared to other companies in its sector.
What are the Next Steps for Apple and Microsoft?
The departure of Apple and Microsoft from the Global Industry Classification Standard (GICS) could mean big things for shareholders of both companies. For Apple, it could mean a move away from the consumer electronics industry and into the communication services sector. This would put them alongside companies like Verizon and AT&T, and could lead to some interesting partnerships or acquisitions. For Microsoft, it could mean a move into the business services sector, which would put them alongside companies like IBM and Oracle. Both moves could lead to increased shareholder value as the companies become less reliant on one another and more focused on their own industries.
Conclusion
In conclusion, the departure of Apple and Microsoft from GICS has the potential to create a major shift in the technology sector. For both companies’ shareholders, this could mean greater investment opportunities as there is less competition vying for their attention. However, it’s important to stay informed about any changes that might come up in order to make sure your investments are going where you want them to go. With careful research and planning, investors can take advantage of this development and benefit from any potential growth that comes with it.
