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Quarterly Rebalance: Retail Food Group Limited (ASX:RFG) kicked out of the S&P/ASX 200

This morning S&P Dow Jones Indices released the changes to its S&P/ASX indices that will be effective at the open of trading on June 18, 2018.

Here is a summary of the changes being made at the next quarterly rebalance:

The S&P/ASX 20

Embattled wealth management company AMP Limited (ASX: AMP) will be removed from the S&P/ASX 20 and replaced with packaging giant Amcor Limited (ASX: AMC).

The S&P/ASX 50

Chemicals, fertilisers, and industrial explosives producer Incitec Pivot Ltd (ASX: IPL) has dropped out of the top 50 index and is being replaced with hearing solutions company Cochlear Limited (ASX: COH).

The S&P/ASX 100

A great 12 months just got even better for coal producer Whitehaven Coal Ltd (ASX: WHC). It has been included in the S&P/ASX 100 at the expense of grains exporter Graincorp Ltd (ASX: GNC).

The S&P/ASX 200

The benchmark S&P/ASX 200 will see three changes at the next quarterly rebalance. The shares of fintech star Afterpay Touch Group Ltd (ASX: APT), machine learning and artificial intelligence dataset provider Appen Ltd (ASX: APX), and poultry producer Inghams Group Ltd (ASX: ING) will all join the index later this month.

Those three shares join the S&P/ASX 200 index at the expense of personal care products company Asaleo Care Ltd (ASX: AHY), information management services company Iron Mountain (ASX: INM), and underfire food and beverage company Retail Food Group Limited (ASX: RFG).

What now?

As some fund managers have restrictions on the shares they can buy, and may only be able to invest in S&P/ASX 200 shares, the shares of Afterpay Touch, Appen, and Inghams could get a boost from their inclusion in the index.

And vice versa for those being kicked out of the benchmark index, though I would be surprised if there are many fund managers still holding onto Retail Food Group’s shares after its horror run. Short sellers with trading restrictions could potentially need to buy shares to close positions, though.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. The Motley Fool Australia has recommended Cochlear Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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