What is an 'Industry Group'

An industry group is a classification method for companies, grouped based on common lines of business. The Global Industry Classification Standard (GICS), a joint effort by MSCI Inc. and Standard & Poor's (S&P), is regarded as the definitive categorization system in the U.S.

BREAKING DOWN 'Industry Group'

The GICS comprises 11 sectors, 24 industry groups, 68 industries and 157 sub-industries. Currently, the 24 industry groups are (in alphabetical order):

  1. Automobiles and Components
  2. Banks
  3. Capital Goods
  4. Commercial and Professional Services
  5. Communication Services
  6. Consumer Durables and Apparel
  7. Consumer Services
  8. Diversified Financials
  9. Energy
  10. Food, Beverage and Tobacco
  11. Food and Staples Retailing
  12. Health Care Equipment and Services
  13. Household and Personal Products
  14. Insurance
  15. Materials
  16. Media
  17. Pharmaceuticals, Biotech and Life Sciences
  18. Real Estate
  19. Retailing
  20. Semiconductors and Semiconductor Equipment
  21. Software and Services
  22. Technology Hardware and Equipment
  23. Transportation
  24. Utilities

The sponsors of GICS reviews the components on an annual basis. With an overall evolution of the economy toward tech and knowledge-based industries, changes in the "industries" and "sub-industries" levels are not uncommon. Sometimes "industry groups" can change, as was the case in late 2017, when the sponsors renamed Telecommunication Services as Communication Services (No. 5 on the above list) in recognition that information and content are now transmitted through many more platform types.

Who Uses GICS?

According to MSCI and S&P, hundreds of asset managers, institutional and retail brokers, custodians, consultants, research analysts and stock exchanges have adopted GICS. "The use of the GICS enables market participants to identify and analyze companies using a common global standard," the sponsors claim. The 24 industry groups, along with the other classifications, facilitate understanding among all market participants with a common language.

RELATED TERMS
  1. Global Industry Classification ...

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

    A sector breakdown is the mix of sectors within a fund or portfolio, ...
  3. Sector Analysis

    Sector analysis is an assessment of the economic and financial ...
  4. Bullet GIC

    A type of guaranteed investment contract where a single payment ...
  5. Industry Bet

    A strategy whereby investors or portfolio managers increase or ...
  6. Transportation Sector

    The transportation sector consists of companies that provide ...
Related Articles
  1. Investing

    GICS Vs. ICB: Competing Systems For Classifying Stocks

    Global Industry Classification Standards and the Industrial Classification Benchmark separate stocks into sectors.
  2. Investing

    Big Changes Are Lurking for Popular Sector ETFs

    Big changes could be coming for some well-known sector ETFs.
  3. Investing

    5 Stocks in the New S&P 500 Real Estate Sector (SPG, AMT)

    Real Estate will have its own sector on the S&P 500 index from August 31 onwards. Major banks expect substantial inflow to the new sector.
  4. Investing

    An Introduction To Sector ETFs

    Find out how sector ETFs can give your portfolio the punch it needs.
  5. Investing

    Best 3 Vanguard Funds in the Healthcare Sector (VHT)

    Discover information about some Vanguard funds that provide exposure to the health care sector, and find out about their characteristics.
  6. Insights

    Industries That Will Never Go Away

    A list of industries that will not perish anytime soon, as they provide and feed our basic needs.
  7. Investing

    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.
  8. Investing

    Play The Market, Sector by Sector

    Sector ETFs are an increasingly important part of the equity ETF space and investors have hundreds to choose from.
  9. Investing

    A Primer on Investing in the Tech Industry

    The technology sector can provide fantastic returns for investors seeking stocks generating a steady stream of growth fueled by a pipeline of innovation.
  10. Investing

    Top Dividend Investments in the S&P 500 Real Estate Sector

    The new S&P 500 real estate sector includes some of the industry's leading dividend paying REITs.
RELATED FAQS
  1. What is the Difference Between an Industry and a Sector?

    The terms industry and sector are often used interchangeably, but they have slightly different meanings, with a sector being ... Read Answer >>
  2. What is the telecommunications sector?

    Telecommunication sector comprises of companies that transmit data in words, voice, audio or video across the globe, learn ... Read Answer >>
  3. What is the financial services sector?

    The financial services sector consists of a diverse group of companies that goes beyond banks and credit unions. Read Answer >>
  4. What does the 'FIG' at an investment bank refer to?

    The 'FIG' at an investment bank usually refers to the financial institutions group - a group of professionals that provides ... Read Answer >>
  5. How are industrial goods different from consumer goods?

    Understand the difference between industrial goods and consumer goods, and learn the different types of industrial goods ... Read Answer >>
Hot Definitions
  1. Capital Asset Pricing Model - CAPM

    Capital Asset Pricing Model (CAPM) is a model that describes the relationship between risk and expected return and that is ...
  2. Return On Equity - ROE

    The profitability returned in direct relation to shareholders' investments is called the return on equity.
  3. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  4. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  5. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  6. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
Trading Center