Fisher Investments Press: Own the World: GICS

The Global Industry Classification Standard (GICS) was developed in 1999 by Morgan Stanley Capital International (MSCI) and Standard & Poor’s (S&P). GICS has a hierarchical structure consisting of four classification levels. The levels get increasingly granular, so each tells a little bit more about a company. The GICS system consists of 10 sectors, 24 industry groups, 68 industries, and 154 sub-industries. Table 4.7 in Own the World: How Smart Investors Create Global Portfolios includes the GICS structure for one sector—Consumer Discretionary. A similar structure exists for each sector in the GICS system.

Let’s run through an example of how an actual company is classified. Fisher Investments thinks most people are familiar with the Japanese firm Sony Corp. Sony makes a number of popular products including PlayStation videogame consoles and VAIO computers. These are considered discretionary items, so it’s no wonder Sony falls into the Consumer Discretionary sector in GICS.