We use the S&P sectors to sort the companies into 11 different sectors. These sectors are known as the Global Industry Classification Standard (GICS). The GICS was created in 1999 by Standard & Poor’s (S&P) and Morgan Stanley Capital International (MSCI). It is used by the majority of the professional investment management community. More than 95% of the world’s listed market capitalization has been classified by GICS.
The GICS sorts companies into sectors based on their primary business activity. Multiple factors are considered, such as a company’s main source of revenue, earnings analysis and market perception. The GICS uses a refined system to sort companies into 11 sectors. These are further divided into 24 industry groups, then into 68 industries, and finally into 157 sub-industries. For the purpose of the database, we only use the 11 fundamental sectors.
Sector - Real Estate
Real Estate was added as a separate GICS sector in 2016. Most companies that now fall under real estate, used to be categorised under financials. Real estate includes realtors, brokers, real estate appraisers and companies that develop and lease properties. It does not include companies that build full houses. A big part of the sector consists of so-called Real Estate Investment Trusts (REIT’s). These companies own, operate or finance real estate. Investors earn dividends without actually buying or managing a property.
Examples of companies in this sector are big names like American Tower Corp. and Deutsche Wohnen.