Industry Classification Benchmark Guide

The Industry Classification Benchmark Guide is a system used to categorize companies into specific industries. It's a way to group similar businesses together for easier comparison and analysis.

The guide is maintained by MSCI, a leading provider of investment decision support tools. MSCI updates the guide regularly to reflect changes in the market and economy.

The guide classifies companies into 11 sectors, each with its own set of sub-industries. For example, the Energy sector includes sub-industries like Oil & Gas and Renewable Energy.

Understanding the Industry Classification Benchmark Guide can help investors and analysts make more informed decisions about where to invest their money.

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The Industry Classification Benchmark (ICB) is a system for assigning all public companies to appropriate subsectors of specific industries.

Developed by Dow Jones and the Financial Times Stock Exchange (FTSE), the ICB is recognized globally for its standardization and consistency.

The ICB system is used to classify companies into industries, providing a clear and organized framework for investors and analysts to understand the market.

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Industry classifications are crucial for making informed investment decisions, and the ICB provides a widely accepted standard for this purpose.

The ICB is used to classify companies into specific industries, such as Information Technology, which is the biggest sector with 25% of world capitalisation according to the FTSE Global Total Cap Index.

This classification helps to identify trends and patterns in the market, allowing investors to make more informed decisions.

The ICB is a valuable tool for anyone looking to understand the industry landscape and make informed investment decisions.

The Industry Classification Benchmark (ICB) is a powerful tool that helps investors make informed decisions. It classifies every public company by its industry, supersector, sector, and subsector.

The ICB hierarchy is adopted by stock exchanges worldwide, making it a widely recognized and trusted system. It's one of two classification systems used globally.

The ICB helps investors research stocks and identify competitors, giving them a competitive edge in the market. By understanding the classification hierarchy, investors can make more informed decisions about which stocks to buy or sell.

Here's a breakdown of the ICB hierarchy:

For example, Gap Inc. is classified as a Clothing & Accessories subsector within the Personal Goods sector, which falls under the Personal & Household Goods supersector within the Consumer Goods industry.

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The Industry Classification Benchmark (ICB) is a hierarchical system used to classify public companies into specific industries. It provides a comprehensive framework for investors to compare and analyze companies within the same industry.

The ICB has undergone several revisions, with ICB 2005, ICB 2007, ICB 2019 V.1, and ICB V.2019 being some of the notable versions. Each version has its own structure, but they all share a similar four-tier classification system.

At the highest level, the ICB has 11 industries, each identified by a 2-digit code. For example, the Technology industry is identified by the code "10". This level of classification is designed to support investment strategies that depend on industry classification.

The ICB also has 20 supersectors, each identified by a 4-digit code. For instance, the Telecommunications supersector is identified by the code "15". Supersectors are further divided into sectors, which are identified by a 6-digit code.

Here's a breakdown of the ICB's four-tier structure:

The ICB's hierarchical structure allows investors to drill down to specific subsectors and analyze companies within those subsectors. This level of detail provides a robust system for comparing and analyzing like-organizations.

The Industry Classification Benchmark (ICB) has undergone significant changes over the years. ICB 2005 was launched in 2005 by FTSE and Dow Jones, two leading index providers, and was in effect from 2008 to 2019.

ICB 2007 introduced a new supersector level for Real Estate, which was previously at the sector level. This change created seven new subsectors for Real Estate Investment Trusts (REITs) and recognized alternative power sources with an alternative energy sector.

ICB 2007 and ICB 2019 V.1 made notable changes, including the broadening of the Telecommunications Industry and the renaming of the Oil and Gas Industry to Energy. ICB 2019 V.1 also created a new Industry for Real Estate and adopted a new Consumer Discretionary and Consumer Staples Industry framework.

Here's a brief overview of the ICB versions and their effective dates:

Between 2007 and V1, significant changes were made to the Industry Classification Benchmark (ICB). The Telecommunications Industry was broadened to incorporate Telecommunications Equipment and Cable Television Services.

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The Oil and Gas Industry was renamed to Energy. A new Industry for Real Estate was created, which was previously under the Financials Industry. The Consumer Goods Industry was also affected, with parts being moved to the new Consumer Staples Industry.

The Consumer Services Industry was similarly impacted, with parts being moved to the new Consumer Discretionary Industry. The system's fine detail was substantially expanded with the creation of 57 new subsectors. The coding system was also changed from the 4-digit format.

The changes between ICB 2007 and ICB 2019 V1 are summarized below:

The ICB 2019 V.2 update brought about significant changes to the classification system. Two new subsectors were added: 20103020 - Cannabis Producers and 50205015 - Transaction Processing Services.

Some codes in the Financials Industry were renamed, but not their definitions. For example, 30204000 was renamed from "Equity Investment Instruments" to "Closed End Investments".

The definition of code 50205020 was updated to include more specific activities when it was renamed from "Back Office Support, HR & Consulting" to "Professional Business Support Services".

ICB is widely used by stock exchanges globally, including Euronext, NASDAQ OMX, London Stock Exchange, and many others, representing over 65% of the world's market capitalization.

These exchanges use ICB to categorize listed companies, allowing for easier tracking and analysis of market trends. The ICB is also used by financial intelligence providers and prominent research institutes, who have integrated it into their products and services.

ICB is used to classify approximately 85,000 securities worldwide, providing a comprehensive data source for investment research, portfolio management, and asset allocation. It's a crucial tool for index providers, who use it to conduct index sector weightings and index attribution analysis.

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The ICB is widely used across the globe, with stock exchanges like Euronext, NASDAQ OMX, and London Stock Exchange relying on it to categorize listed companies.

ICB is used by stock exchanges to categorize listed companies, representing more than 65% of the world's market capitalization.

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It's also used by data providers to create a reference data map, allowing systems to categorize, manage, and follow companies by industry.

Asset managers use ICB for sector exposure analysis, strategy execution, and attribution reporting.

Index providers use ICB to conduct index sector weightings and index attribution analysis, and to construct sector indexes for passive investing.

ICB is used to classify approximately 85,000 securities worldwide, providing a comprehensive data source for investment research, portfolio management, and asset allocation.

Here are some of the organizations that use ICB:

Company research is an essential part of the process, and it's done in a transparent way. Companies are allocated to subsectors based on a research process that assesses revenue source data and other publicly available information.

You can understand exactly how and why companies are allocated in the Ground Rules. This information is publicly available, so you can review it if you're curious.

The research process is designed to be unbiased, which is great for getting an accurate picture of a company's business. If you think a company has been misclassified, you can challenge the assigned classification through a publicly available form.

Here are the steps to challenge a company classification:

The ICB has a competitor in the Global Industry Classification Standard (GICS). The GICS was developed in a partnership between Standard & Poors and Morgan Stanley Capital International.

The Toronto Stock Exchange, the Australian Stock Exchange, and the NOREX Alliance use the GICS standard. They are among the many organizations that have adopted this classification system.

Most of the same sector and industry designations exist in both the GICS and the ICB. This means that investors and analysts can easily compare data and trends across the two systems.

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The Industry Classification Benchmark (ICB) is a powerful tool for investors and researchers. It classifies every public company by its industry, supersector, sector, and subsector.

The ICB is one of two classification systems adopted by stock exchanges worldwide. This helps ensure consistency and comparability across different markets.

The benchmark's hierarchy is structured as follows: industry, supersector, sector, and subsector. For example, Gap Inc. is classified under the Clothing & Accessories subsector within the Personal Goods sector.

Here's a breakdown of the ICB hierarchy:

This classification system helps investors research stocks and identify competitors more effectively.