S&P DJI to review planned changes to Google weightings

March 3, 2014

NEW YORK, March 3 (Reuters) - Standard & Poor's Dow Jones Indices on Monday said it will review whether its planned changes to Google Inc's weightings in widely used market indexes could hurt investors, and took the unusual step of asking worried index fund managers to address the potential costs.

Google had announced plans on Feb. 3 to issue new Class C shares, and distribute one Class C share for each Class A or Class B share outstanding. S&P DJI then planned to include A and C shares in its S&P 500 and S&P 100 indexes of large companies until June 20, after which it would include only C shares and increase the float.

But portfolio managers who track those indexes, which is normally a tax-efficient strategy, complained to S&P DJI that this would force them to replace A shares with C shares, and by selling the A shares pass on capital gains to investors. They also objected to the loss of voting rights from selling the A shares, according to a letter to index investors and index fund managers from S&P DJI.

S&P DJI said any comments should be sent by March 10 to index_services@spdji.com and include "Google Share Split" in the subject line.