S&P 500 to Add Real Estate (11/14)

See the article below on S&P’s plan to add the Real Estate Sector in August 2016. This is the third mega Wall Street shift towards Yale’s ETF portfolio prescription.

Early last month, Calpers, the biggest U.S. fund at $295 billion, increased their real estate exposure target by 26%. The fund will soon have 11% allocated to REITs, up from 8.7% earlier this year.

Even Japan’s Government Pension, the world’s largest at $1.1 trillion, is significantly increasing its exposure to real estate and global equities, using ETFs.

All three of these mega Wall Street shifts are towards the portfolio prescribed in 2005 by Yale’s CIO, David Swensen, in his personal investment book, “Unconventional Success.”

See InvestableBenchmarks.com and the “Best ETFs for Growth.”

S&P Dow Jones Indices…Announce the Creation Of A Real Estate Sector…

NEW YORK, Nov. 10, 2014 /PRNewswire/ — S&P Dow Jones Indices, a leading provider of financial market indices, and MSCI Inc., a leading provider of investment decision support tools worldwide, announced today that as a result of their annual review of the Global Industry Classification Standard (GICS®) structure, a new Real Estate Sector is being created, elevating its position from under the Financials Sector and bringing the number of GICS Sectors to 11. Additionally, a new Sub-Industry for Copper is being created. The changes are being considered for implementation after the market close (ET) on August 31, 2016.

Feedback from the annual GICS structural review confirmed that Real Estate is now viewed as a distinct asset class and is increasingly being incorporated separately into the strategic asset allocation of asset owners,” said Remy Briand, Managing Director and Global Head Equity Research at MSCI. “Investors told us that there are significant differences between public Real Estate and Financial companies and therefore Real Estate deserves a dedicated GICS Sector. Today’s announcement ensures that GICS continues to be the most accurate, complete and standard industry analysis framework for investment research, portfolio management and asset allocation.”

According to David Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, “Real estate is an important and growing part of major economies throughout the world. To reflect this and support good financial analysis, GICS is introducing an eleventh sector for Real Estate and redefining financials to exclude Real Estate. This is an example of our on going effort to ensure that GICS is reflective of today’s markets.

The annual review is intended to ensure that the GICS structure continues to appropriately represent the global equity markets and, thereby, enables asset owners, asset managers and investment research specialists to make consistent global comparisons by industry. The GICS revision is the result of a consultation with members of the global investment community.

S&P Dow Jones Indices and MSCI are proposing to implement the changes to the GICS structure after the market close (ET) on Wednesday, August 31, 2016, but are requesting feedback from market participants on this proposed implementation date by February 13, 2015. The final decision on the date of implementation will be announced by March 13, 2015. The list of securities affected by these changes will be announced at a later date closer to the implementation, but with plenty of advance notice.

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