Global Industry Classification Standard - GICS

AAA

DEFINITION of 'Global Industry Classification Standard - GICS'

A standardized classification system for equities developed jointly by Morgan Stanley Capital International (MSCI) and Standard & Poor's. The GICS methodology is used by the MSCI indexes, which include domestic and international stocks, as well as by a large portion of the professional investment management community.

The GICS hierarchy begins with 10 sectors and is followed by 24 industry groups, 67 industries and 147 sub-industries. Each stock that is classified will have a coding at all four of these levels.


INVESTOPEDIA EXPLAINS 'Global Industry Classification Standard - GICS'

The GICS system was established in 1999 and has since become widely followed through direct use by portfolio managers and benchmarking to MSCI indexes. All told, more than 26,000 stocks worldwide have been classified by GICS, accounting for more than 95% of the world's listed market capitalization. MSCI estimates that more than $3 trillion in assets is benchmarked to its MSCI funds, many of which are sector-specific.

The main goal of GICS is to allow all market participants to classify stocks by standardized industry definitions. GICS is used to make portfolio diversification and overall asset allocation decisions from within a common framework.

GICS competes with the Industry Classification Benchmark (ICB) system, which is maintained by Dow Jones and London's FTSE Group. In practice, most of the same sector and industry designations exist in both standards.

RELATED TERMS
  1. Industry Group

    A classification method for individual stocks or companies, usually ...
  2. MSCI Inc

    An investment research firm that provides indices, portfolio ...
  3. Sector Fund

    A stock mutual, exchange-traded or closed-end fund that invests ...
  4. Sector

    1. An area of the economy in which businesses share the same ...
  5. Industry Classification Benchmark ...

    A company-classification system for stocks developed by Dow Jones ...
  6. Tactical Asset Allocation - TAA

    An active management portfolio strategy that rebalances the percentage ...
Related Articles
  1. Markets

    Great Company Or Growing Industry?

    Look at the big picture when choosing a company - what you see may really be a stage in its industry's growth.
  2. Mutual Funds & ETFs

    Major Blunders In Portfolio Construction

    Do you have the best mix of investments? Find out how to make sure.
  3. Mutual Funds & ETFs

    GICS Vs. ICB: Competing Systems For Classifying Stocks

    Global Industry Classification Standards and the Industrial Classification Benchmark separate stocks into sectors.
  4. Retirement

    Where Top Down Meets Bottoms Up

    Find the investing "sweet spot" by combining these two styles.
  5. Investing

    What is the difference between an industry and a sector?

    The terms industry and sector are often used interchangeably to describe a group of companies that operate in the same segment of the economy or share a similar business type. Although the terms ...
  6. Taxes

    What is the best method of calculating depreciation for tax reporting purposes?

    Learn the best method for calculating depreciation for tax reporting purposes according to generally accepted accounting principles, or GAAP.
  7. Fundamental Analysis

    Are accounts receivable used when calculating a company's debt collateral?

    Learn how accounts receivables are recorded as assets on a balance sheet; they are used when calculating a company's total debt collateral.
  8. Fundamental Analysis

    Work In Progress (WIP)

    Work in progress, also know as WIP, is an asset on the company balance sheet. WIP is the accumulated costs of unfinished goods that are currently in the manufacturing process.
  9. Fundamental Analysis

    What is the difference between cost of equity and cost of capital?

    Read about some of the differences between a company's cost of equity and its cost of capital, two measures of its required returns on raised capital.
  10. Fundamental Analysis

    Is depreciation only used for tangible assets?

    Learn if tangible assets can be depreciated, as well as what other assets are eligible for depreciation so you can account for them accurately.

You May Also Like

Hot Definitions
  1. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  2. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  3. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  4. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  5. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  6. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
Trading Center