The change took effect in September. TS Lombard estimates sector ETFs sold around $10 billion of Facebook, Alphabet and other stocks, like Twitter Inc., that moved out of tech. Those companies should have been picked up by communications services ETFs but investors were slow to move their money to reflect the new weightings, Brennan wrote in a Nov. 4 note.

That’s certainly true: communications ETFs house just $5.5 billion, with Vanguard and State Street’s products investing 30 to 40 percent in Facebook and Alphabet.

But Vanguard’s $20 billion tech-focused VGT didn’t have much left to sell in September. It adopted interim indexes and gradually sold out of the two companies. By the end of August, the ETF had just 1.3 percent in Facebook and 2.4 percent in Alphabet, worth about $840 million, data compiled by Bloomberg show. State Street’s $19.5 billion XLK had about $3.6 billion of exposure at the reclassification in September, the data show.

“Everyone knew this was on the move for almost nine months leading up to it so it’s hard to see why this would be the catalyst in this discrete period of time,” said Rich Powers, head of ETF product management at Vanguard. “The sector funds are relatively small in assets relative to the total market cap of the industry, and the trading that happens among active funds.”

Active Approach

Hedge funds turned underweight on technology, communications and internet retail companies for the first time since at least 2010, RBC Capital Markets wrote in a note on Friday.

Meanwhile, active manager Wellington Management Group reduced its position in Facebook by 13 million shares in the third quarter, while T Rowe Price Group Inc. axed 10 million shares -- both more than XLK sold. AllianceBernstein and JPMorgan Chase & Co. unloaded some Facebook and Alphabet shares in the three-month period ending Sept. 30.

That’s not to say the sector switch had no impact at all. Some active managers look to keep positions within 5 or 10 percent of certain benchmarks and may have adjusted their holdings to reflect the new categories, while others could have used the reclassification as a pivot point to rethink their allocations.

Entering October, valuations of technology stocks were pretty stretched -- the Nasdaq 100 Index’s price-to-earnings ratio was about 25 percent higher than the S&P 500’s. The companies had also been at the forefront of a rally in growth and momentum stocks, making them ripe for a large correction, particularly as hawkish statements from the Federal Reserve sent bond yields soaring.

“When some of these big moves happen, people thirst for a rational and logical explanation, and indexes and ETFs often fit that bill very nicely,” said Lance Humphrey, a money manager in the global multi-assets team at USAA Asset Management. “Indexes and ETFs are very easy punching bags.”