NEW YORK CITY—In advance of real estate's new classification as a standalone sector within the Global Industry Classification Standard universe, S&P Dow Jones Indices said Wednesday it had launched the Real Estate Select Sector and Financial Services Select Sector indices. Both indices have been licensed to State Street Global Advisors to serve as the basis for exchange traded funds.

The newly launched Real Estate Select Sector includes the GICS Real Estate Industry Group excluding mortgage REITs. Conversely, the Financial Services Select Sector excludes the Real Estate Industry Group but includes mortgage REITs.

The addition of the two new indices expands SPDJI's roster of Select Sector indices from nine to 11.  “The launch of Real Estate and Financial Services Select Sector indices demonstrates our commitment to evolving this index family, acknowledging its growing importance amongst investors and within the markets overall,” says Philip Murphy, VP of North American equity indices at SPDJI.

Under the new taxonomy announced last November by S&P and MSCI Inc., real estate will have its own classification and no longer will be folded into the financial sector classification. The change is scheduled to take place after the market closes on August 31, 2016.

“Real estate, once the villain of the financial crisis, is now lauded as the place to find yield, diversification and maybe stability,” David M. Blitzer, chair of the index committee at SPDJI, blogged this past November. “Before REITs became eligible for the S&P 500 in October 2001, real estate investing either meant direct ownership or a specialized corner of the stock market. The recovery from the financial crisis focused attention on real estate and REITs to understand what happened and why.  With equity markets at record highs and yields and interest rates at record lows, the search for yield is focusing attention on REITs and real estate companies.”