In the record bull market of the US stock market, investors in exchange-traded funds (ETF) have made generous excess returns by investing in technology stocks. However, a series of indices tracked by many of the world's largest ETF will undergo a major correction next week, when investors may find their ETF almost completely revamped.

S&P Global Inc. Ratings and MSCI, the world's two largest index companies, are about to adjust their industry classification standards to form a new industry category called "Communication Services" by merging telephone companies, some Internet companies and media stocks. After the restructuring, giants such as FacebookInc. And Alphabet Inc-CL C's parent company, Alphabet Inc., will disappear from many ETF that track the tech stock index.

"the technology index will lose some of its biggest star stocks," said Eric Balchunas, an industry research analyst at Bloomberg. "it's like the Golden State Warriors lost Kevin Durant and Stephen Curry. "

The revision of the Global Industry Classification Standard (GICS) was announced as early as November last year and will be implemented after the close of trading on September 28. However, investors need to be careful, as not all ETF issuers will respond to the index correction in the same way.

Different methods

Vanguard Group Inc. And State Street, two of the world's top three ETF issuers, will adjust their ETF holdings in line with the new index. Vanguard's three ETF have been tracking the new transition index since May, with the goal of taking positions that ultimately reflect changes in the index. State Street has also launched a SPDR fund for the communications services selection industry under the code XLC.

XLC's turnover exceeded $215 million on Thursday, a record for the fund and more than eight times its average daily trading volume since it began trading in June. On Thursday, an investor bought 1.1 million shares of XLC, worth about $54 million.

On the other hand, the iShares core US industry series ETF managed by Blackrock, the world's largest ETF issuer, will not be adjusted, which means that iShares Asustek American Technology ETF (code IYW) will maintain the huge weight of Facebook Inc and Alphabet Inc-CL C combined.

So, previously, the positions of ETF in the same industry managed by different companies were very similar, but now there will be significant differences. Daniel Prince, head of product consulting at iShares, said investors may feel the need to reallocate their money as returns diverge.