GICS, or Global Industry Classification Standard, is a standardized framework used to classify and categorize companies into distinct industry groups. Developed jointly by MSCI (Morgan Stanley Capital International) and S&P Global, GICS is widely recognized and utilized by global investors, asset managers, and financial professionals as a means to facilitate consistency and comparability across various sectors and industries.
GICS consists of a hierarchical structure that classifies companies into 11 sectors, 24 industry groups, 69 industries, and 158 sub-industries. These sectors cover a broad range of industries including energy, materials, industrials, consumer discretionary, consumer staples, healthcare, financials, information technology, communication services, utilities, and real estate. The classification system is based on a company's primary business activity and revenue sources.
Each sector is further divided into industry groups, which are then broken down into individual industries and sub-industries. This classification provides a comprehensive and organized framework for investors to analyze and compare companies, understand their key operational areas, and make informed investment decisions.
GICS is widely used as a tool for asset allocation, portfolio construction, and benchmarking. It allows investors to track and compare the performance of companies within the same industry, identify trends and opportunities, and build diversified portfolios. Additionally, GICS is used in various financial research and reporting applications, including stock market indices and sector-based analysis.
