After the close on March 17, 2023, changes to the Global Industry Classification Standard (GICS®) structure went into effect in GICS Direct and in S&P DJI’s indices.
The changes affected most sectors and essentially changed what it means to be sector neutral. They also had the potential to dramatically impact performance reports if not corrected for in the reporting details.
“GICS changed around 15 securities, which affected most of the S&P sectors.”, said Tracy Carter, Client Services & Product Support Manager, GreenHill Investment Reporting. “From what we’ve heard, none of the trust accounting systems appear to be able to correctly transact for these sector changes. Our Customer Service Group (CSG) team members, working closely with our clients, had to manually pull out the prior month classifications and put in transactions (Sales/Purchases) to move securities from one sector to another.”
In one example, Visa (V) moved from “IT” to “Finance”. If the GreenHill CSG team had not manually made these corrections, and Visa stock moved from “IT” to “Finance” with no offsetting transactions, then the monthly rate of return for “IT” would show a huge loss and the monthly rate of return for FIN would have a huge gain.
However, with the GreenHill CSG team not only keeping a close watch for these types of issues but proactively making adjustments to properly account for them, clients remain unimpacted by the changes—with investment performance reporting flowing through accurately and without unwanted surprises.
Just another example of why leading banks, non-profits, family offices, and investment advisors have made GreenHill Investment Reporting their trusted partner in investment reporting.