GICS Structure To Change In 2014

January 16, 2014

A November press release announced the outcome of S&P Dow Jones Indices and MSCI’s joint annual review of the Global Industry Classification Standard (GICS). The review is aimed at ensuring the GICS structure most accurately represents global equity markets.

The new GICS structure covers 10 sectors divided into 24 industry groups, 67 industries and 156 subindustries.

Shifts outlined in the MSCI press release include the creation of subindustries for renewable energy; silver; hotel and resort REITs and health care REITs.

Definition changes in the diversified metals, mining and steel subindustries will also take place.

The construction, farm machinery and heavy trucks subindustry will be restructured into two subindustries covering construction machinery and heavy trucks; and agricultural and farm machinery. Meanwhile, the computer hardware and the computer storage and peripherals subindustries will be combined to create the brand-new technology hardware, storage and peripherals subindustry.

The subindustries of photographic products and office electronics will be discontinued, while leisure equipment and products industry is being renamed leisure products.

Other definition changes will occur as well, including the subindustry definitions within the banks industry group. The definitions of the consumer electronics, Internet software and services subindustries are also to be updated, and the commercial banks industry is being reclassified under the broader banks umbrella.

Finally, the biotechnology subindustry is being redefined to exclude companies that produce products unrelated to health care.

The changes will be effective as of the end of trading on Friday, Feb. 28, 2014, but GICS Direct clients are scheduled to receive a list of impacted securities by Jan. 6, 2014.


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