This article provides a detailed comparative analysis of the two dominant industry classification systems used in global finance: the Industry Classification Benchmark (ICB) and the Global Industry Classification Standard (GICS), examining their structural differences, classification philosophies, and practical implications for portfolio analytics. Using data from the FTSE All-World Index, the study evaluates sector-level overlaps, discrepancies in company assignments, and differences in risk behavior (as measured by Betas) across major industries such as Technology, Energy, and Consumer Discretionary. It further explores how these divergences affect portfolio risk modeling and Brinson-style performance attribution, demonstrating that classification choice can meaningfully alter sector weights, risk contributions, and attribution outcomes.

David Suarez, CFA, PRM