The Global Industry Classification Standard enables all market participants to classify stocks by standardised industry definitions.

GICS is a standardised classification system for equities made up of a hierarchy of 10 sectors, 24 industry groups, 67 industries and 147 sub-industries.

  • Level 1: the sector
  • Level 2: the industry group
  • Level 3: the industry
  • Level 4: the sub-industry

Every stock on the ASX is classified and coded for each of these different levels.

GICS allows the SMSF manager to diversify and make asset allocation decisions from within a structured framework. We use the GICS extensively in our Momentum Investment Course when we investigate the level of economic activity in the different areas of the economy.

In the US and Europe there are specific tradable instruments called Exchange Traded Funds (ETFs) that concentrate on specific sectors (GICS Level 1) and industry groups (GICS Level 2), offering investors a straightforward way to participate in the rotation of a specific sector and even specific industries. Within Australia there are a growing number of Exchange Traded Funds that will make it increasingly easier to gain well targeted exposure to specific sectors within the Australian market.

GICS Level 1 and Level 2

Below is a table of GICS Level 1 (sectors) and GICS Level 2 (industry groups). GICS Level 1 is comprised of ten sectors which are then divided into 24 industry groups.

Sector Industry Groups
Energy Energy
Materials Materials
Industrials Capital Goods
Commercial & Professional Services
Transportation
Consumer Discretionary Automobiles & Components
Consumer Durables & Apparel
Consumer Services
Media
Retailing
Consumer Staples Food & Staples Retailing
Food, Beverage & Tobacco
Household & Personal Products
Health Care Health Care Equipment & Services
Pharmaceuticals, Biotechnology & Life Sciences
Financials Banks
Diversified Financials
Insurance
Real Estate
Information Technology Software & Services
Technology Hardware & Equipment
Semiconductors & Semiconductor Equipment
Telecommunication Services Telecommunication Services
Utilities Utilities