Investing May 26, 2000

Launch Approaches for New S&P Index Classifications

May 26, 2000 (PLANSPONSOR.com) - Plan sponsors could soon see some performance shifts following the introduction of a new sector classification system. Standard & Poor's will spend the next four to five weeks validating a new calculation for the S&P indices using the Global Industry Classification Standard that the company launched with MSCI last August.

Reported by

Nevin E. Adams

Originally planned for a June 1 launch, S&P will now release the new calculation process for the indices at the end of the validation period.

Standard and Poor’s has completed the five-year history using the new system. It will calculate both the new and old groupings for a transition period. The new classifications were developed to ease the investment research and management process for financial professionals worldwide.

The re-classifications could impact performance comparisons against specific sectors within the indexes, though the securities within the indexes themselves will not change as a result of the reclassification.

The Global Industry Classification Standard consists of 10 economic sectors aggregated from 23 industry groups, 59 industries, and 123 sub-industries covering almost 6,000 companies globally.

All Sectors now have a two-digit identification code, all Industry Groups have a 4-digit identification code, all Industries have a 6-digit identification code and all Sub-Industries have an 8-digit identification code.