What’s happening?  

On November 15, 2017, S&P Dow Jones and MSCI Inc. announced that as a result of their annual review of the GICS structure, the Telecommunication Sector is being renamed the Communication Sector and broadened to include companies that facilitate communication and offer related content and information through various media. The renamed sector will include:

  • The existing telecommunication companies.
  • Companies from the Consumer Discretionary Sector currently classified under the Media Industry Group (e.g., Comcast) and the Internet & Direct Marketing Retail Sub-Industry (e.g., Netflix).
  • Companies from the IT Sector currently classified under the Software & Services Industry Group (e.g., Alphabet and Facebook).

Select companies will also be moving from the IT Sector to the Consumer Discretionary Sector.

In January 2018, MSCI published a partial list of impacted companies. MSCI expects to publish the full list in July 2018.

To align with the GICS changes, Vanguard will temporarily track custom benchmarks for the 3 impacted funds:

  • Vanguard Consumer Discretionary Index Fund.
  • Vanguard Information Technology Index Fund.
  • Vanguard Telecommunication Services Index Fund, to be renamed Vanguard Communication Services Index Fund.

When will these changes take place?

Vanguard believes it’s in the best interest of investors to complete the known benchmark transitions before the effective date of the GICS changes, which has yet to be announced. Vanguard’s transition will take approximately 4 months and will begin in the second quarter of 2018.  The funds will track transition benchmarks until MSCI’s index changes are complete, at which point they’ll transition back to the applicable MSCI benchmarks. Vanguard will also rename Vanguard Telecommunication Services Index Fund to Vanguard Communication Services Index Fund at the start of the transition in the second quarter of 2018.

“We believe a thoughtful and strategically timed transition to adopting the new benchmarks is in the best interests of shareholders as it will help mitigate any market impact for Vanguard investors,” said Greg Davis, Vanguard’s chief investment officer.

What’s behind the changes?

Telecommunications companies are broadening their scope by offering customers “bundled” communication services, including cable, internet, phone, and entertainment features through various media. To reflect this industry growth, the Telecommunication Sector will expand to include select internet and media stocks and will be renamed the Communication Services Sector. 

What do these changes mean for shareholders?

These changes don’t require any action from investors. “GICS’s changes reflect industry advancements in the way we communicate and access media. These updated sectors create a clearer industry classification system,” said Davis.


All investing is subject to risk, including the possible loss of the money you invest.

Funds that concentrate on a relatively narrow market sector face the risk of higher share-price volatility.

The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities. The prospectus or the Statement of Additional Information contains a more detailed description of the limited relationship MSCI has with Vanguard and any related funds.

The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard and Poor’s, a division of McGraw-Hill Companies, Inc. (“S&P”) and is licensed for use by Vanguard. Neither MSCI, S&P, nor any third party involved in making or compiling the GICS or any GICS classification makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability, or fitness for a particular purpose with respect to any such standard or classification. Without limiting any of the foregoing, in no event shall MSCI, S&P, any of its affiliates, or any third party involved in making or compiling the GICS or any GICS classification have any liability for any direct, indirect, special, punitive, consequential, or any other damages (including lost profits) even if notified of the possibility of such damages.