WHAT IS 'Industry Classification Benchmark - ICB'

The Industry Classification Benchmark (ICB) is a company-classification system for stocks developed by Dow Jones and the Financial Times Stock Exchange (FTSE). FTSE International Limited, trading as FTSE Group and FTSE Russell, is a British provider of stock market indices and associated data services, wholly owned by the London Stock Exchange (LSE) and operating from its headquarters in Canary Wharf. The ICB is a system that classifies both domestic and international stocks. Each company is allocated to the subsector that most closely represents the nature of its business, based first and foremost on its primary source of revenue.

BREAKING DOWN 'Industry Classification Benchmark - ICB'

The Industry Classification Benchmark (ICB) is a globally recognized standard, which is operated and managed by FTSE Russell, and used to categorize companies and securities across four levels of classification. With approximately 100,000 securities classified worldwide, the ICB provides a comprehensive source of data along with a categorizing system for investors around the globe. The principal goal of the ICB is to categorize individual companies into subsectors, based on each company's major source of revenue. The ICB has a four-tier, hierarchical industry-classification structure. The ICB uses a system of 10 industries, split into 18 super-sectors, and further divided into 39 sectors, which, in turn, contain 104 subsectors. The first- and second-level industry and super-sector tiers are designed to support investment strategies that depend on such classification. The ICB drills down further at the third- and fourth-level sector and subsector tiers.

The ICB is adopted by stock exchanges around the world, including Euronext, NASDAQ OMX, London Stock Exchange, Taiwan Stock Exchange, Johannesburg Stock Exchange, Borsa Italiana, Singapore Stock Exchange, Athens Stock Exchange, SIX Swiss Exchange, Cyprus Stock Exchange and Boursa Kuwait. These exchanges represent over 65 percent of the world's market capitalization. The ICB offers investors two levels based on time. There is the weekly database, where product files are generated on the last business day of the week and available by 10:00 p.m. EST. There is also the daily database, where files containing daily changes are produced at the end of each business day of the week and are available by 10:00 p.m. EST.

Comparing Industry Classification Benchmark with Other Benchmarks

The ICB is a single standard that defines the market. The ICB competes with the Global Industry Classification Standard (GICS) for equities, which was developed in a partnership between Standard & Poor's and Morgan Stanley Capital International. It’s worth noting that most of the same sector and industry designations exist in both the GICS and the ICB.

RELATED TERMS
  1. Global Industry Classification ...

    The Global Industry Classification Standard - GICS is a standardized ...
  2. Sector ETF

    A sector exchange traded fund (ETF) invests in the stocks and ...
  3. Footsie

    Footsie is slang for the Financial Times-Stock Exchange 100 Share ...
  4. Sector Breakdown

    A sector breakdown is the mix of sectors within a fund or portfolio, ...
  5. North American Industry Classification ...

    The North American Industry Classification System is a business-classification ...
  6. London Stock Exchange - LSE

    The London Stock Exchange (LSE) is the primary stock exchange ...
Related Articles
  1. Investing

    Top 3 ETFs That Short the FTSE 100

    As Brexit looms, these three inverse exchange-traded funds (ETFs) can be used to gain short exposure to the U.K.'s FTSE 100 Index.
  2. Tech

    G-20 Classifies Bitcoin as an Asset

    Countries are more likely to view cryptocurrencies as assets than as currencies.
  3. Investing

    Benchmark To Show Winning Returns

    You can't win if you don't keep score. Read on to learn how to measure your returns.
  4. Insights

    The Birth of Stock Exchanges

    Learn about the evolution of stock exchanges, from the Venetian states to the British coffeehouses, and finally to the NYSE.
  5. Investing

    Spread Out Risk With Sector-Based ETFs

    These ETFs take the sector rotation strategy from institutional investors and puts it in your hands.
  6. Investing

    Retired? Don't Be in Broad-Based Index Funds

    When it comes time to divest, you need to be able to sell high, not low, but broad-based index funds won’t let you do this. There is a solution.
  7. Tech

    Is the Trump Surprise a Buying Opportunity for Stocks?

    The light at the end of the tunnel may not be an oncoming train.
  8. Insights

    The NYSE and Nasdaq: How They Work

    Learn some of the important differences in the way the NYSE and Nasdaq exchanges operate and the securities that trade on them.
RELATED FAQS
  1. What are all of the securities markets in the U.S.A?

    Securities can be bought and sold via a number of exchanges in the US. Learn about the major and somewhat lesser-known U.S. ... Read Answer >>
  2. Trading hours of world's major stock exchanges

    Learn about stock exchange trading hours, the opening and closing times of some major global stock market exchanges, and ... Read Answer >>
Trading Center