The Global Industry Classification Standard (GICS®) is about to experience a major change since its inception in 1999. As a result of the evolving investment landscape, Real Estate will be added as a new sector effective September 1st, 2016.
With the creation of the new Real Estate Sector we acknowledge its growing importance in today’s global economy. This change will elevate its position from under the Financial Sector, recognizing Real Estate as a distinct asset class and a foundational building block of a modern portfolio.
Learn more about the impact and benefits of the upcoming change.
- Sebastien Lieblich and David Blitzer explain the upcoming GICS change
- Webinar-Introducing the 11th GICS Sector: Real Estate
- Press Release
- Proforma GICS Structure effective Sept 1, 2016
- In 1999, MSCI and Standard & Poor’s developed the Global Industry Classification Standard (GICS), seeking to offer an efficient investment tool to capture the breadth, depth and evolution of industry sectors.
- GICS is a four-tiered, hierarchical industry classification system.
- It consists of 10 sectors, 24 industry groups, 67 industries and 156 sub-industries.
- Companies are classified quantitatively and qualitatively. Each company is assigned a single GICS classification at the sub-industry level according to its principal business activity. MSCI and Standard & Poor’s use revenues as a key factor in determining a firm’s principal business activity.
- Earnings and market perception, however, are also recognized as important and relevant information for classification purposes, and are taken into account during the annual review process.
GICS is a common global classification standard used by thousands of market participants across all major groups involved in the investment process: asset managers, brokers (institutional and retail), custodians, consultants, research teams and stock exchanges
GICS enables clients to:
- Capture and assess the impact of global, regional or local industry trends on a portfolio
- Compare and report on industry sector exposures versus peers or benchmarks
- Pinpoint industry investment opportunities across developed and emerging markets
- Analyze sector and industry contributions to portfolio performance
- Construct consistently defined global or regional sector-based and sector rotation strategies
- Standardized industry definitions are applied to companies globally
- The structure precisely reflects the current state of industries in global investment markets
- The classification consists of four levels of analysis, ranging from the most general sector to the most specific sub-industry
- Annual reviews are conducted to ensure that classifications remain accurate and fully reflective of the changing global economy Global Industry Classification Standard (GICS®)
Jun 1, 2015:
Consultation On Potential Changes To The Global Industry Classification Standard (GICS®) Structure In 2016
Nov 10, 2014:
S&P Dow Jones Indices and MSCI Announce Revisions to the Global Industry Classification Standard (GICS®) Structure in 2016
Jun 2, 2014:
GICS Consultation Paper - 2015