The financial sector in Canada Includes companies which provide financial services such as bank, insurance and investment management. This sector is the most important in Canada by market capitalization and includes some of the most important and most famous banks in the country such as the Royal Canada Bank (RBC), the Toronto-Dominion Bank (TD) and the Nova Scotia Bank (Scotia-Bank).
The energy sector includes companies involved in the exploration, production and distribution of oil and natural gas. Some of the largest companies in this sector include Canadian Natural Resources Limited (CNRL) and Suncor Energy Inc.
The materials sector includes companies involved in the production of raw materials such as metals, minerals and chemicals. Some of the largest companies in this sector include Barrick Gold Corporation and Potash Corporation of Saskatchewan Inc.
The health care sector includes companies involved in the research, development and production of health products and services. Some of the largest companies in this sector include Valeant Pharmaceuticals International, Inc. and the Canadian Medical Protective Association.
The discretionary sector of consumers includes companies that provide non -essential goods and services such as cars, clothing and media. Some of the largest companies in this sector include Brookfield Renewable Partners LP and Canadian Tire Corporation, Limited.
It should be noted that these are only a few examples, and there are many other companies in each sector that contribute to their global market capitalization. In addition, it should also be noted that the market capitalization of companies can change over time depending on their financial performance, which can also change the relative size of the sectors.
What is the GIC?
The GIC represents the global standard for industry classification and it is a business classification system according to their main commercial activities. The GIC structure consists of 11 sectors, 24 industrial groups, 68 industries and 157 sub-industrial.
In Canada, the best GICS sectors by market capitalization are:
- Financial
- Energy
- Materials
- Health care
- Discretionary of consumers
- Communication services
- Public services
- Industrial
- Computer science
- Consumption staples
It should be noted that the classification of GICs and the relative size of the sectors can change over time depending on market conditions and performance of individual companies.
About the GIC
The GICS system is designed to help investors and analysts understand business business activities and how they are linked to each other. The 11 GIC sectors are: energy, materials, manufacturers, consumer discretion, consumption staples, health care, finance, information technology, communication services, public services and real estate.
Each of these sectors is then divided into several industrial groups, which are then divided into industries and sub-industrials. For example, the energy sector is divided into industrial exploration and production, oil and integrated gas groups and oil and gas refining and marketing. Each industry group is then divided into industries, such as the Exploration and Production Industry Group is divided into independent E&P industries and oil and gas drilling.
Finally, each industry is divided into sub-industrials, such as the independent E&P industry is divided into sub-industrials of the North American E&P and the International E&P.
The GICS system is updated periodically to reflect changes in the economy and business activities. The latest update took place in 2018. It is widely used by market players such as analysts, investors and fund managers, to classify and assess companies and make sectoral and industrial comparisons. Companies are also evaluated according to their income, their market share and other financial measures, and are compared to companies in the same industry or the same sector.
How are GICs useful?
GICs are useful in several ways:
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First, it provides a standardized framework to classify companies: GICS provides a coherent and widely accepted method to classify companies according to their commercial activities, which facilitates investors and analysts to understand and compare companies between different sectors and industries.
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It helps investors and analysts to identify trends and opportunities: using GIC, investors and analysts can identify trends and opportunities within specific sectors and industries, which can help them make informed investment decisions.
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It helps financing managers and portfolio managers to diversify their portfolios: GIC helps financing managers and portfolio managers diversify their portfolios by providing a full list of sectors and industries, which can be used to identify companies that are under-represented in a portfolio.
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It helps comparative analysis: GICs are widely used to create reference indexes such as S&P 500, which are used to compare the performance of a portfolio compared to a given reference.
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It helps financial analysis: GIC can also be used to analyze the financial performance of a company by comparing it to other companies within the same industry or the same sector.
In summary, the GICS provide a standardized framework to classify and assess companies, which helps investors and analysts make more informed investment decisions, to diversify their portfolios, compare their performance and analyze the financial performance of a company.
Last words
In conclusion, the World Industry Classification Standard (GICS) is a business classification system according to their main commercial activities, developed by Standard & Poor’s (S&P) and MSCI. The GIC structure consists of 11 sectors, 24 industrial groups, 68 industries and 157 sub-industrial. It is widely used by investors, analysts and other market players to classify businesses and sectors in order to analyze and compare their performance.
The GICS system is designed to provide a coherent and comparable way to classify companies in different countries and regions. The GICS classification system is periodically examined and updated to ensure that it continues to reflect the evolution of the nature of the global economy and the changing business models of companies.
