After the market closes on Friday, September 28, S&P Dow Jones Indices and MSCI will implement structural changes to the Global Industry Classification Standard (GICS)—the classification standard they use to categorize companies by sector, industry, and sub-industry within their market indices. Only 3 of the 11 GICS sectors will be affected, but changes to those 3 will be significant. It’s important for equity investors—especially those who use index-tracking strategies—to learn what’s changing and understand the impact of the changes on key characteristics of these sectors.

With contributions from Daniel Sarnowski, Portfolio Specialist, WFAM Global Fixed Income

We are now in a period of rising interest rates, and investors may wonder how municipal bonds have fared in past periods of rising rates and if they have a place within an asset allocation plan today. The answer is that, historically, municipal bonds have performed well when interest rates are increasing.

Our previous article—the first in a three-part series—provided overviews of five areas that have been experiencing tremendous growth through strong technological innovation or by leveraging advances in the internet and discussed each area’s key growth catalysts. We refer to these five areas as SCODI, which stands for:

  • Software as a Service (SaaS)
  • Cloud
  • Online retail
  • Digital payments
  • Internet of Things (IoT)

The world is racing toward universal connectivity. By 2020, the number of global internet users is projected to reach 4.1 billion, up 1.1 billion (37%) from 2015, and global Internet Protocol networks are expected to support 26.3 billion devices and connections by then—10 billion (61%) more than in 2015, according to Cisco Systems, Inc. With the soaring demand, five innovative areas have experienced tremendous growth that hasn’t yet shown signs of slowing. We refer to these five areas as SCODI.

Key takeaways:

  • The recent short-term trend whereby stock prices have not initially responded as favorably to earnings surprises is likely temporary. If a company’s share price doesn’t react to a positive earnings surprise and good guidance, that could be an indication that the stock is underappreciated and undervalued.

With contributions from Gabriel G. Diederich, CFA, Portfolio Manager; Brandon Pae, Senior Analyst, Municipal Credit Research; and Gilbert L. Southwell III, Senior Analyst, Municipal Credit Research

The U.S. Supreme Court ruled on June 21, 2018, that states may require online retailers to collect sales taxes.

Investors’ interest in outcome-oriented investing and strategies customized to their personal goals and values has surged in recent years. Environmental, social, and governance (ESG) investments have benefited from this trend. According to the Forum for Sustainable and Responsible Investment, rising interest in these strategies over the past decade has boosted ESG assets significantly—to $8.72 trillion by the start of 2016, representing a 33% increase over a two-year period.