The S&P Dow Jones Indexes and MSCI recently announced the addition of the Real Estate sector as the 11th headline sector under the Global Industry Classification Standard (GICS), effective Wednesday, August 31, 2016.
The Global Industry Classification Standard (GICS), is an industry sorting tool developed by S&P and MSCI in 1999 for the global financial community. GICS is now the most widely used classification system for stock exchange-listed equities around the world. Stocks of companies listed on S&P and MSCI financial market indexes are assigned to sector and industry groupings associated with their principal business activity, which then qualifies them for inclusion in various indices and Exchange Traded Funds (ETFs).
GICS is introducing an eleventh sector for Real Estate and redefining Financials to exclude Real Estate. Under the current classification, real estate is listed as a sub-industry under the financial sector, with banks, insurance companies, and diversified financials.
IMHO, since the global markets melt down, due in part to excessive crude prices, and shaky bank real estate loans, loans that got bundled and sold as a package … the importance of real estate, global real estate to the health and well being of global markets and economies is clear.
There is only so much land. The oceans are rising. Islands, island countries are being reclaimed by the oceans and their peoples displaced. Even continental shore lines are at risk of being redrawn on maps … and shoreline communities forced to relocate further inland. So, elevating real estate to a sector should bring common understanding, analysis, appraisal and valuations into the 21st Century.
more to follow ….