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Investing.com -- S&P Dow Jones Indices announced a sweeping overhaul of its benchmark tracking on Friday, propelling several technology and industrial firms into the prestigious S&P 500. Shares of Vertiv Holdings Co (NYSE:VRT) surged 5.6% in after-hours trading following the news, while EchoStar Corporation (NASDAQ:SATS) and Lumentum Holdings Inc (NASDAQ:LITE) also saw significant gains.
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The quarterly reshuffle is designed to maintain the integrity of the market’s most-watched gauges. S&P DJI stated that "The changes ensure that each index is more representative of its market‑capitalization range" across the large, mid, and small-cap tiers.
Vertiv, Lumentum, Coherent Inc (NYSE:COHR), and EchoStar will officially join the S&P 500 prior to the opening of trading on Monday, March 23. To make room for these additions, the index will remove Match Group Inc (NASDAQ:MTCH), Molina Healthcare Inc (NYSE:MOH), Lamb Weston Holdings Inc (NYSE:LW), and Paycom (NYSE:PAYC).
Higher up the ladder, the S&P 100 will see a notable influx of semiconductor and industrial heavyweights, including Micron Technology Inc (NASDAQ:MU) and GE Vernova LLC (NYSE:GEV). These moves come at the expense of veteran financial firms like PayPal Holdings Inc (NASDAQ:PYPL) and American International Group Inc (NYSE:AIG), which are exiting the blue-chip 100-member club.
Investors expect these adjustments to trigger billions in passive fund flows as institutional managers realign their portfolios with the new benchmarks. The effective dates are spread across the next two weeks, beginning with the SmallCap 600 adjustment on March 13.