HIG - Sector reshuffle gives Financials more growth power; here are Goldman's top names
2023-03-07 06:32:29 ET
Some major names will change sectors in a reshuffle next week.
Among the biggest moves are fintech companies moving from Info Tech ( XLK ) to Financials ( XLF ) in the GICS reclassification on March 17.
Visa ( NYSE: V ), Mastercard ( NYSE: MA ), PayPal ( PYPL ), Fiserv ( FISV ), Fidelity National Information Services ( FIS ), Global Payments ( GPN ), FleetCor ( FLT ) and Jack Henry ( JKHY ) are all shifting.
"The GICS reclassification is unlikely to impact investors’ views or positioning in these affected stocks, especially given many fund managers are not constrained by GICS definitions," Goldman equity strategist David Kostin said. "However, the movement of stocks between sectors has implications for the sector tilts of mutual funds relative to their benchmarks."
"In particular, the reclassification of V and MA – two long-time mutual fund overweights – from Info Tech to Financials will lead mutual funds to be even more overweight Financials and even more underweight Info Tech," Kostin said. "For sector-neutral fund strategies that rely on GICS, the definitional change could result in some portfolio reshuffling on the margin."
Goldman screened for the best growth stocks in Financials, with growth ranked relative to sector on 2021-2024 EPS compound annual growth rate. Five newcomers made the screen.
The stocks are:
- Progressive ( PGR ), EPS CAGR '21-'24 of 31%
- Everest Re ( RE ), 24%
- Arch Capital ( ACGL ), 24%
- Arthur J. Gallagher ( AJG ), 22%
- Mastercard ( MA ), 20%, new
- W.R. Berkley ( WRB ), 19%
- Schwab ( SCHW ), 19%
- Huntington Bancshares ( HBAN ), 19%
- Globe Life ( GL ), 18%
- Chubb ( CB ), 17%
- Visa ( V ), 17%, new
- Hartford Financial ( HIG ), 16%
- Fiserv ( FISV ), 14%, new
- MSCI ( MSCI ), 14%
- FleetCor ( FLT ), 14%, new
- Raymond James ( RJF ), 14%
- Ameriprise Financial ( AMP ), 14%
- Global Payments ( GPN ), 13%, new
- FactSet Research ( FDS ), 13%
- Assurant ( AIZ ), 13%
See the ETFs affected by the sector reshuffle .
For further details see:
Sector reshuffle gives Financials more growth power; here are Goldman's top names