- The estimated dividend yield on the financial sector as of Aug. 1 is 2.28%, but that's expected to fall 20 basis points after REITs leave for their own sector, reports Daisy Maxey in the WSJ.
- The drop doesn't seem like much, but in a world of microscopic interest rates, 20 bps is a relative whopper.
- "A lot of people will sit down and crunch the numbers, and they may change their minds” about financial sector holdings, says S&P Dow Jones' David Blitzer.
- The change will occur after the market close on Aug. 31, but will be implemented in the indexes on Sept. 16. Mortgage REITs will remain in the financial sector.
- Fund companies aren't expecting any tax impact, but they're making no guarantees. Vanguard will be transferring about 26.4% of the securities in its $3.8B Financial Index Fund (MUTF:VFAIX) and 26.4% of those in its $3.7B Financials ETF (NYSEARCA:VFH) out of the funds through a quarterly rebalance.
- Another fund with work to do is the iShares Edge MSCI Minimum Volatility ETF (NYSEARCA:USMV), which has 10.4% of assets in real estate names. The percentage exposed to real estate will likely slip, and that to financials increase, according to BlackRock.
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, JHMF, FAZZ, FNCF