When I heard about the new sector changes coming to the S&P 500 earlier this year, I kept an open mind. I understand why the committee wants to move things around and break up the FANG names as they gradually take over the entire economy, industry by industry.
But this afternoon Michael and I were talking about the new categorizations of stocks and where they’re putting what. And a thought occurred to me – can you imagine what someone selling a sector rotation fund is now going to say about their backtest? What about someone telling you there’s some sort of message about the economy embedded in sector gains or losses or intermarket analysis?
Do you just pretend that all of the stocks haven’t been moved around? How does that conversation go starting next month?
This is a quick one, had to say it.
You can read more about the new weightings in this weekend’s Barron’s cover story: