Industry Classification Benchmark - ICB

DEFINITION of 'Industry Classification Benchmark - ICB'

A company-classification system for stocks developed by Dow Jones and FTSE. The Industry Classification Benchmark (ICB) is a system that classifies both domestic and international stocks.

Every company has a place in the ICB, which has a four-tier, hierarchical industry-classification structure. The ICB uses a system of 10 industries, partitioned into 18 supersectors, which are further divided into 39 sectors, which in turn contain 104 subsectors.

BREAKING DOWN 'Industry Classification Benchmark - ICB'

The principal aim of the ICB is to categorize individual companies into subsectors based primarily on each company's major source of revenue. The ICB is adopted by stock exchanges representing over 65% of the world's market capitalization.

The ICB competes with the Global Industry Classification Standard (GICS) for equities, which was developed jointly by Morgan Stanley Capital International (MSCI) and Standard & Poor's. In practice, most of the same sector and industry designations exist in both standards.

RELATED TERMS
  1. Global Industry Classification ...

    A standardized classification system for equities developed jointly ...
  2. Emerging Industry

    A group of companies in a line of business formed around a new ...
  3. Growth Industry

    A sector of the economy experiencing a higher-than-average growth ...
  4. Declining Industry

    An industry where growth is either negative or is not growing ...
  5. Futures Market

    An auction market in which participants buy and sell commodity/future ...
  6. Capital Markets

    Capital markets are markets for buying and selling equity and ...
Related Articles
  1. Investing Basics

    Industry Handbook

    In this feature, we take an in-depth look at the various techniques that determine the value and investment quality of companies from an industry perspective.
  2. 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.
  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. Active Trading

    Market Efficiency Basics

    Market efficiency theory states that a stock’s price will fully reflect all available and relevant information at any given time.
  5. Economics

    The History of Stock Exchanges

    Stock exchanges began with countries who sailed east in the 1600s, braving pirates and bad weather to find goods they could trade back home.
  6. Fundamental Analysis

    5 Predictions for the Chinese Stock Market in 2016

    Find out why market analysts are making these five ominous predictions about the Chinese stock market in 2016, and how it may impact the entire world.
  7. Economics

    How Interest Rates Affect The U.S. Markets

    When indicators rise more than 3% a year, the Fed raises the federal funds rate to keep inflation under control.
  8. Investing Basics

    Financial Markets: Capital vs. Money Markets

    Financial instruments with high liquidity and short maturities trade in money markets. Long-term assets trade in the capital markets.
  9. Economics

    The Ripple Effect: Interest Rates and the Stock Market

    Investors should observe the Federal Reserve’s funds rate, which is the cost banks pay to borrow from Federal Reserve banks.
  10. Investing Basics

    Calculating Floating Stock

    Floating stock is the number of shares a company has available for trade in the open market.
RELATED FAQS
  1. 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 ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. What is the difference between shares outstanding and floating stock?

    Shares outstanding and floating stock are different measures of the shares of a particular stock. Shares outstanding is the ... Read Full Answer >>
  4. What is the difference between market risk premium and equity risk premium?

    The only meaningful difference between market-risk premium and equity-risk premium is scope. Both terms refer to the same ... Read Full Answer >>
  5. What is the difference between the QQQ ETF and other indexes?

    QQQ, previously QQQQ, is unlike indexes because it is an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index. The ... Read Full Answer >>
  6. What is the difference between an investment and a retail bank?

    The activities and types of clients for an investment bank versus those for a retail bank highlight the primary difference ... Read Full Answer >>
Hot Definitions
  1. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  2. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  3. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  4. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  5. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
Trading Center