S&P Dow Jones Indices (S&P DJI) is currently conducting a consultation with members of the investment community on a potential change to the S&P Sri Lanka 20.
S&P Dow Jones Indices which is a division of S&P Global is considering revising the index methodology in order to reduce single sector concentration in the index.
The index-based company is seeking consultation specifically for a proposal to add a 35 percent GICS sector cap which impacts constituent weightings.
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As per the proposed methodology, constituent company and GICS sector weights are capped at 15 percent and 35 percent, respectively, at each quarterly rebalancing.
Currently, constituent company weights are only capped at 15 percent at each quarterly rebalancing.
The Global Industry Classification Standard (GICS) is an industry taxonomy which consists of 11 sectors, 24 industry groups, 68 industries and 157 sub-industries.
GICS is used as a basis for S&P market indexes in which each company is assigned to a sub-industry, and to a corresponding industry, industry group and sector.
S&P Dow Jones Indices said it will accept survey responses until December 1, 2017. To participate in this consultation, respond to index_services@spglobal.com.
The company said all comments from this consultation will be reviewed and considered before a final decision is made, however, no obligation to comply with any of the responses.
If the company decides to change the index methodology, an announcement will be made, S&P Dow Jones Indices further said.
