Market Consultation

FTSE Russell Client Consultation for
Integrating Industry Classification Structures
Industry Classification Benchmark (ICB) and
Russell Global Sectors (RGS)

Important Information
The proposals set out in this consultation document are included in order to gather feedback and may
or may not result in changes to the ICB or RGS.

ftserussell.com

December 2016

FTSE Russell Client Consultation for
Integrating Industry Classification
Structures
Responding to the Consultation
Please submit your response to the questions included in this consultation online athttps://www.surveymonkey.co.uk/r/NB2JJPH. If you have any questions about this survey, or if you
encounter any technical issues, please contact rpawson@FTSERussell.com.

Introduction
As part of our commitment to deliver the best possible solutions for our clients, we have reviewed themethodologies and taxonomies of the current industry classification systems, Industry Classification Benchmark(ICB) and Russell Global Sectors (RGS), in order to propose a unified classification structure that leverages thebest of both systems, reflects the evolution across industries, and accommodates future enhancements.
The proposed unified classification structure will be based on the ICB framework: Industry (Level 1), Supersector(Level 2), Sector (Level 3), Subsector (Level 4). As ICB and RGS currently use different nomenclature across theexisting structures, we will refer to Levels 1-4 throughout this consultation to add clarification.
The purpose of this consultation is to gather feedback on the proposed unified classification structure, sevenstructural changes and the implementation timeline. The proposals set out in this consultation document areincluded in order to gather feedback and may or may not result in changes to the ICB or RGS.
The proposed structural changes for which we would like to gather client feedback include:
1) Consumer Goods and Consumer Services: Transition ICB from a Consumer Goods/Consumer
Services Industry (Level 1) framework to a Consumer Staples/Consumer Discretionary Industry (Level 1)
framework.
2) Real Estate: Carve Real Estate out of the ICB Financials Industry (Level 1) and RGS Financial Sector(Level 1) to create a new Real Estate Industry (Level 1). Mortgage REITs remain in the Mortgage Finance
Subsector (Level 4) within Financials.
3) REITs: Maintain distinct Sectors (Level 3) for REIT and non-REIT Real Estate and add granularity to
REIT Subsectors (Level 4). Feedback is also requested as to whether a company’s REIT status should
continue to influence its identification within an industrial classification framework.
4) Telecommunications: Merge ICB Telecommunications Industry (Level 1) with Utilities Industry (Level 1)
and adapt ICB’s differentiation between Fixed Line and Mobile Telecommunications Subsectors (Level 4).
5) Energy: Rename the ICB Oil & Gas Industry (Level 1) to Energy, create new Renewable and NonRenewable Energy Sectors (Level 3), and move ICB Coal Subsector (Level 4) from Basic Materials to
Energy as a Coal Subsector (Level 4).
6) Airlines: Group airline companies into an Airlines Subsector (Level 4) within Industrials alongside othertransportation-related companies.

FTSE Russell

27) Consumer Digital Services: Create a new Consumer Digital Services Subsector (Level 4) within
Consumer Discretionary to classify companies involved in digital platforms that generate revenues fromadvertising, content delivery and other virtual products related to consumers. Discontinue the ICB Internet
Subsector (Level 4) and reclassify internet-related companies as Consumer Digital Services Subsector(Level 4).

The complete ICB and RGS mapping along with proposed ICB mapping is available in the Appendix. A summaryof the current ICB and RGS structures and high level proposed structural changes can be found below.
Table 1: Comparison of current and proposed levels and counts within each level.
Current ICB

Current RGS

Industry (10)Sector (9)Supersector (19)Subsector (33)Sector (41)Subsector (114)

Proposed ICB
Industry (Level 1) (10)Industry (157)Supersector (Level 2) (20)Sector (Level 3) (43)Subsector (Level 4) (166)

Table 2: Comparison of current ICB Industries and RGS Sectors (Level 1) and proposed Industry (Level 1).
Current ICB
Industry (10)Current RGS
Sector (9)Proposed ICB
Industry (10)Oil and Gas

EnergyEnergyBasic Materials

Materials and Processing

Basic Materials

Industrials

Producer Durables

Industrials

Consumer Goods

Consumer Discretionary

Consumer Discretionary

Consumer Services

Consumer Staples

Consumer Staples

Health Care

Health Care

Health Care

Financials

Financial Services

Financials

Telecommunications

Real Estate

Utilities

Utilities

Utilities

Technology

Technology

Technology

Table 3: Summary of proposed ICB Industry (Level 1) changes.
Current ICB
Industry (10)Oil and Gas

Name change

Proposed ICB
Industry (10)EnergyBasic Materials

Basic Materials

Industrials

Industrials

Consumer Goods
Consumer Services

Restructured to align with the Consumer Discretionary /Consumer Staples Framework

Health Care

Consumer Discretionary
Consumer Staples
Health Care

Financials

Real estate carved out

Financials

Telecommunications

Merged with Utilities

Real Estate

Utilities

Utilities

Technology

Technology

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3

Table 4: Summary of proposed ICB Supersector (Level 2) changes.
Current ICB
Supersector (19)
Oil and Gas

Name change

Proposed ICB
Supersector (20)EnergyChemicals

Chemicals

Basic Resources

Basic Resources

Construction & Materials

Construction & Materials

Industrial Goods & Services

Industrial Goods & Services

Automobiles & Parts

Automobiles & Parts

Food & Beverage

Name change

Food, Beverage & Tobacco

Personal & Household
Goods

Restructured to align with the Consumer Discretionary /Consumer Staples Framework

Consumer Products & Services
Personal Care, Drug & Grocery Stores

Health Care

Health Care

RetailRetail

Media

Media

Travel & Leisure

Travel & Leisure

Telecommunications
Utilities

Telecommunications
Name ChangeElectricity, Gas, Water & Multi-utilities

Banks

Banks

Insurance

Insurance

Financial Services

Financial Services

Real Estate

Real EstateTechnology

Technology

Table 5: Summary of proposed RGS Sector (Level 1) changes.
Current RGS
Sector (9)EnergyProposed ICB
Industry (10)EnergyMaterials and Processing

Name Change

Basic Materials

Producer Durables

Name Change

Industrials

Consumer Discretionary

Consumer Discretionary

Consumer Staples

Consumer Staples

Health Care
Financial Services

Health Care
Name Change, Real estate carved out

Financials
Real Estate

Utilities

Utilities

Technology

Technology

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4

I. Consumer Industries
Current Structures
ICB incorporates Consumer Goods and Consumer Services at the Industry (Level 1) level.
ICB Industry

I

ICB Supersector

ICB Sector

Automobiles & Parts

Automobiles & Parts

Food & Beverage

Beverages
Food Producers

Consumer
Goods

Consumer
ServicesICB Subsector

Refer to Appendix Table 1: Current ICB
Structure for list of subsectors.

Personal andHousehold Goods

Household Goods & Home
Construction
Leisure Goods
Personal Goods
TobaccoRetailFood & Drug Retailers
General Retailers

Media

Media

Travel & Leisure

Travel & Leisure

Refer to Appendix Table 1: Current ICB
Structure for list of subsectors.

RGS incorporates Consumer Staples and Consumer Discretionary at the Sector (Level 1) level.
RGS Sector

RGS Subsector

RGS Industry

Consumer
Discretionary

Auto & Auto Parts
Consumer Products
Consumer Services
LeisureMedia

Refer to Appendix Table 2: Current
RGS Structure for list of subsectors.

Consumer
Staples

Food/Beverage & Tobacco
Personal Care/Drug & Grocery Stores

Refer to Appendix Table 2: Current
RGS Structure for list of subsectors.

Proposed StructureTransition ICB from a Consumer Goods/Consumer Services Industry (Level 1) framework to a Consumer
Staples/Consumer Discretionary Industry (Level 1) framework.

Distinguish between consumer goods and services within Supersectors (Level 2), Sectors (Level 3) and
Subsectors (Level 4).

FTSE Russell

5Industry(Level 1)

Supersector (Level 2)

Sector (Level 3)

Subsector (Level 4)

Automobiles & Parts
Consumer Products & Services

Automobiles & Parts
Consumer Services
Personal Goods
Household Goods & Home
Construction
Media
RetailersTravel & Leisure

Refer to Appendix Table 3:
Proposed New ICB Structure
for list of subsectors.

Beverages
Food Producers
TobaccoPersonal Care, Drug & Grocery
Store

Refer to Appendix Table 3:
Proposed New ICB Structure
for list of subsectors.

Consumer
Discretionary
Media
RetailersTravel & Leisure

Food, Beverage and Tobacco
Consumer
Staples
Personal Care, Drug & GroceryStore

Supporting Analysis
Distinct behavior during economic cycles. Grouping Consumer Staples and Consumer Discretionary companies
together is important because they exhibit distinct characteristics and behaviors during different phases of
economic cycles.
Accepted and used by global investors. Consumer Staples and Consumer Discretionary categories are used byinvestors globally for economic timing and risk allocation.
Industry standard for investment vehicles. 95% of all consumer sector focused mutual funds and ETFs globallyare based on either Consumer Discretionary or Consumer Staples sector indexes.
Differentiation between goods and services already exists at the most granular level. Descriptors for goods andservices are found throughout existing Levels 2-4 (e.g., Auto Parts, Auto Services).

1. Which convention do you prefer to use when grouping consumer–oriented companies?
Consumer discretionary and consumer staples
Consumer goods and consumer services
Other (state preference)

2. Do you agree with the proposal to transition ICB to the Consumer Discretionary and Consumer
Staples framework within the new structure?
Yes
No
Provide justification (open-end answer)

FTSE Russell

6II. Real Estate and REITs
Current Structures
Both ICB and RGS include Real Estate within their respective financials categories, and both have separate
groupings for REIT and non-REIT Real Estate.
ICB Industry

I

ICB Supersector

ICB Sector

ICB Subsector

Banks

Banks

Refer to Appendix Table 1: Current ICB
Structure for list of subsectors.

Insurance

Nonlife InsuranceLife Insurance

Refer to Appendix Table 1: Current ICB
Structure for list of subsectors.

Financial Services

Financial Services
Equity Investment Instruments
Non-equity Investment
Instruments

Refer to Appendix Table 1: Current ICB
Structure for list of subsectors.

Real Estate Investment &Services

Real Estate Holding & Development
Real Estate Services

Real Estate Investment Trusts

Industrial & Office REITs
Retail REITs
Residential REITs
Diversified REITs
Specialty REITs
Mortgage REITs
Hotel & Lodging REITs

Financials

Real Estate

RGS Sector

RGS Subsector

RGS Industry

Banks
Insurance
Consumer Finance & Credit Services
Investment Banking and Brokerage Services

Refer to Appendix Table 2: Current RGS
Structure for list of subsectors.

Real Estate

Real Estate Services
Real Estate Holding and Development
Diversified Real Estate Activities

Real Estate Investment Trusts

Equity REIT: Industrial
Equity REIT: Residential
Equity REIT: Retail
Equity REIT: Lodging and Resorts
Equity REIT: Health Care
Equity REIT: Storage
Equity REIT: Office
Equity REIT: Timber
Equity REIT: Infrastructure
Equity REIT: Other Specialty
Equity REIT: Diversified
Mortgage REIT: Residential
Mortgage REIT: Commercial
Mortgage REIT: Diversified

Financial
Services

FTSE Russell

7Proposed StructureCarve Real Estate out of the ICB Financials Industry (Level 1) and RGS Financial Sector (Level 1) to create a
new Real Estate Industry (Level 1). Mortgage REITs remain in the Mortgage Finance Subsector (Level 4)
within Financials.



Create distinct Sectors (Level 3) for REIT and non-REIT Real Estate and add granularity to REIT Subsectors(Level 4).
Industry(Level 1)

Supersector (Level 2)

Sector (Level 3)

Subsector (Level 4)Real Estate Holding &Development
Real Estate Investment & Services
Real Estate Services

Real Estate

Real Estate

Real Estate Investment Trusts

Health Care REIT
Hotel & Lodging REIT
Industrial REIT
Office REIT
Residential REIT
Retail REIT
Storage REIT
Timber REIT
Infrastructure REIT
Diversified REIT
Other Specialty REIT

Supporting Analysis
The Real Estate Industry has reached a critical mass. The weight of the RGS Real Estate sub-sector in the
Russell Global Financial Services Index has grown from 3% in 1996 to 21% in 2016, representing nearly $2 trillion
in market capitalization.
Global assets invested in Real Estate has grown to $471 billion. In August 2005, $100 billion in assets were
invested in global real estate funds, with 68% of these assets in REIT products (funds that include “REIT” in its
name or benchmark). By July 2016, assets benchmarked to real estate funds had grown to $471 billion, with 77%
or $362 billion of assets in REIT products.
The ICB Real Estate Supersector is the least correlated among the ICB supersectors in the Financials Industry..
The correlation of Real Estate to Banks, Financial Services, and Insurance has steadily declined since 2008 from
0.68, 0.70, 0.80 to 0.11, 0.27, 0.43.
REITs and non-REIT real estate behave as two distinct Real Estate sub-asset classes. As a result of thesedifferences, REITs are discussed and grouped as such by investors, media and academics to differentiate themfrom standard real estate companies. Real estate investors prefer to clearly and easily identify REITs from nonREITs in an industry classification structure despite the fact that a company’s REIT status refers to its corporate
tax structure rather than an industrial output.
REIT investors require granularity when categorizing and analyzing REITs. Our proposed new classification
structure incorporates RGS’s recently-enhanced granular categories of REITs (e.g., separates ICB Industrial &Office REITs into two distinct categories and adds new categories for Health Care and Storage REITs).

FTSE Russell

8Mortgage REITs derive revenue from real estate financing rather than the real estate itself. Mortgage REITs
provide financing for real estate by purchasing or originating mortgages and mortgage-backed securities (MBS)and earning income from the interest on these investments.

3. Do you agree with the proposal to remove Real Estate from Financials and create a new Real Estate
Industry (Level 1)?
Yes
No
Provide justification (open-end answer)

4. Do you agree with the proposal to maintain Mortgage Real Estate Investment Trusts (REITs) within
Financials rather that moving them to the new Real Estate Industry (Level 1)?
Yes
No
Provide justification (open-end answer)

5. Do you agree with the current proposal to maintain REITs as a stand-alone category within theclassification structure or would you prefer to identify REITs via a data flag that exists outside of the
four-level classification structure?
Grouping within the new structure
Flag
Provide justification (open-end answer)

6. Do you agree with the current proposal to split REITs and non-REITs at the Sector level (Level 3) or doyou prefer to group REITs at the Supersector level (Level 2)?
Sector (Level 3)
Supersector (Level 2)
Provide justification (open-end answer)

7. Do you feel that grouping specialty REITs such as Infrastructure and Timber REITs separately fromtraditional REITs is important?
Yes, group specialty REITs by creating distinct subsectors (Level 3) for Specialty REITs (e.g.
Infrastructure, Timber, etc.) and Traditional REITs (e.g., Residential, Office, Storage, etc.) (not pictured
above)
Yes, distinguish specialty REITs at the Subsector level (Level 3) (as pictured above)No, grouping of specialty REITs is not required
Provide justification (open-end answer)

8. Do you believe that certain non-traditional REIT types should be removed from the Real Estatecategory and reclassified (e.g., move Timber REITs to Forestry)?
Yes

FTSE Russell

9No
Provide justification (open-end answer)

III. Telecommunications
Current Structures
ICB includes telecommunication service companies in the Telecommunications Industry (Level 1), which includes
fixed line telecommunications and mobile telecommunications. Telecommunication equipment companies areincluded in the ICB Technology industry (Level 1).
ICB Industry

I

Telecommunications

ICB Supersector

ICB Sector

ICB Subsector

Fixed Line Telecommunications

Fixed Line Telecommunications

Mobile Telecommunications

MobileTelecommunications

Telecommunications

RGS includes telecommunication service companies in the Utilities Sector (Level 1). Telecommunications
equipment companies are included in the RGS Technology Sector (Level 1).
RGS Sector

Utilities

RGS Subsector

RGS Industry

Utilities

Utilities: Telecommunications
Utilities: Electrical
Utilities: Gas Distributors
Utilities: Water
Utilities: Miscellaneous

Proposed StructureMerge ICB Telecommunications Industry (Level 1) with Utilities Industry (Level 1) (already in place within
RGS)

Adapt ICB’s differentiation between Fixed Line and Mobile Telecommunications Subsectors (Level 4).



Maintain the distinction between Telecommunications and other Utilities companies throughout theSubsectors (Level 2), Sectors (Level 3), and Subsectors (Level 4).

Industry(Level 1)

Supersector (Level 2)

Sector (Level 3)

Subsector (Level 4)

Electricity

Alternative Electricity
Conventional Electricity

Electricity, Gas, Water &Multi-utilities
Gas, Water & Multi-utilities
Utilities

Gas Distributors
Multi-utilities
Water

Fixed Line Telecommunications

Fixed Line Telecommunications

Mobile Telecommunications

Mobile Telecommunications

Telecommunications

FTSE Russell

10Supporting Analysis
The weight of telecommunications services companies has continued to diminish over time both in the US andglobally. Today, telecommunications service companies represent 2.55% of the Russell 3000 Index, dominatedby US companies (AT&T, Verizon). Telecommunications represent 3.78% of the FTSE All World Index.
Telecommunication service companies are not different enough from utilities to require their own ICB Industry(Level 1). For example, revenue structures are similar, and they tend to pay higher yields than the broader
market. Also, utilities and telecommunication service companies face similar government regulatory approval for
growth. This over-arching similarity supports the high correlation in risk and returns of Utilities andTelecommunication companies.

9. Do you agree with the proposal to merge the ICB Telecommunications Industry with the new Utilities
Industry (Level 1)?
Yes
No
Provide justification (open-end answer)

10. As telecommunications companies begin to converge with cable and media companies, should theTelecommunications Industry (Level 1) be merged into the Media Supersector (Level 2) within
Consumer Discretionary?
Yes
No
Provide justification (open-end answer)

11. If you believe that Telecommunications belongs within an Industry (Level 1) other than Utilities,
please note preferred Industry (Level 1) placement and provide rationale for your preference.
Open end answer

FTSE Russell

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IV.

EnergyCurrent Structures
ICB places Coal in the Basic Materials Industry.
ICB Industry

I

ICB Supersector

ICB Sector

ICB Subsector

Forestry & Paper

Forestry
Paper

Industrial Metals & Mining

AluminumNonferrous Metals
Iron & Steel

Mining

Coal
Diamonds & Gemstones
General Mining
Gold Mining
Platinum & Previous Metals

ChemicalsCommodity Chemicals
Specialty Chemicals

Alternative Energy

Renewable Energy Equipment
Alternative Fuels

Oil & Gas Producers

Exploration & Production
Integrated Oil & Gas

Oil Equipment, Services &Distribution

Oil Equipment & Services
Pipelines

Basic Resources
Basic
Materials

Chemicals

Oil & Gas

Oil & Gas

RGS places Coal in the Energy Sector.
RGS Sector

RGS Subsector

RGS Industry

Alternative Energy

Alternative Energy

Energy Equipment & Services

Energy Equipment
Oil Well Equipment & Services

Non-Renewable Energy

Coal
Gas Pipeline
Offfshore Drilling & Other Services
Oil: Refining & Marketing
Oil: Crude Producers
Oil: Integrated

EnergyFTSE Russell

12Proposed Structure

Rename the ICB Oil & Gas Industry (Level 1) to Energy.

Create new Renewable and Non-Renewable Energy Supersectors (Level 2).

Move ICB Coal Subsector (Level 4) from Basic Materials to Energy as a Coal Sector (Level 3).

Industry(Level 1)

Supersector (Level 2)

Sector (Level 3)

Subsector (Level 4)

Coal

Non-Renewable Energy
EnergyEnergyRenewable Energy

Integrated Oil & Gas
Offshore Drilling & Other Services
Oil Equipment & Services
Oil Refining and Marketing
Oil: Crude Producers
Pipelines
Alternative Fuels
Renewable Energy Equipment

Supporting Analysis
Oil, gas and coal comprise the primary components of the world’s energy source and are classified as such byindustry bodies. Oil, coal and natural gas comprise 81.4% of the world’s energy as defined by International
Energy Agency in the Key World Energy Statistics 2015.
12. Do you agree with the proposal to rename ICB’s Oil and Gas Industry (Level 1) and Oil and Gas
Industry Supersector (Level 2) to Energy?
YesNo
Provide justification (open-end answer)

13. Do you agree with the proposed separation of Non-Renewable and Renewable energy at the Sector
level (Level 3) or do you believe that Renewable Energy is large enough to be promoted to theSupersector level (Level 2) level?
Sector (Level 3)
Supersector (Level 2)
Provide justification (open-end answer)

14. Do you agree with the proposal to move Coal from the current ICB Basic Materials Industry (Level 1)
to Energy? Coal is already categorized as Energy within the RGS structure.
Yes
No
Provide justification (open-end answer)

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13

V. Airlines
Current Structures
ICB splits the categorization of airlines across two industries. Passenger airlines are classified within the ICB
Consumer Services Industry under Travel & Leisure, and cargo airlines are classified within the ICB Industrials
Industry under Delivery Services.
ICB Industry

I

ICB Supersector

Consumer
Services

Travel & Leisure

Industrials

Industrial Goods &ServicesICB Sector

ICB Subsector

Travel & Leisure

Airlines
Gambling
HotelsRecreational Services
Restaurants & Bars
Travel & Tourism

Industrial Transportation

Delivery Services
Marine Transportation
Railroads
Transportation Services
Trucking

RGS groups passenger airlines and cargo airlines together within the RGS Producer Durables Sector underTransportation & Freight.
RGS Sector

Producer
DurablesFTSE Russell

RGS Subsector

RGS Industry

Transportation & Freight

Aerospace
Air Transport
Commercial Vehicles & Parts
Railroad Equipment
Railroads
Commercial Services: Rental & Leasing
Shipping
Transportation Miscellaneous
Truckers

14

Proposed StructureGroup airline companies into an Airlines Subsector (Level 4) within Industrials alongside other transportationrelated companies.

Industry(Level 1)

Industrials

Supersector (Level 2)

Industrial Goods &Services

Sector (Level 3)

Subsector (Level 4)

Industrial Transportation

Airlines
Commercial Vehicles & Parts
Marine Transportation
Railroad Equipment
Railroads
Transportation Services
Trucking

Supporting Analysis
Airlines’ correlation to Industrials is growing, suggesting better alignment. Prior to the Global Financial Crisis,
Airlines had higher 3-year correlation to the Consumer Discretionary sector, however beginning with the Jan
2010-Dec 2012 period, airlines have consistently had higher 3-year correlation to Industrials, likely due in part topassenger airlines’ increased focus on servicing business travelers.

15. Do you agree with the proposal to group all airlines together within an Airlines Subsector (Level 4)?
Yes
No
Provide justification (open-end answer)

16. Is it important to distinguish cargo from passenger airlines even though many passenger airlines also
carry cargo?
Yes
No
Provide justification (open-end answer)

17. Is it important to distinguish budget passenger airlines from other passenger airlines?
Yes
No
Provide justification (open-end answer)
18. Is the overarching notion of “industrial transport” sufficient for grouping airlines, rail, maritime, andtrucking?
Yes
No
Provide justification (open-end answer)

FTSE Russell

15

VI.

Consumer Digital Services

Current Structures
ICB categorizes companies providing internet-related services in the ICB Internet subsector within the Technology
Industry.
ICB Industry

Technology

I

ICB Supersector

ICB Sector

ICB Subsector

Software & Computer Services

Computer Services
Internet
SoftwareTechnology Hardware &Equipment

Computer Hardware
Electronic Office Equipment
Semiconductors
Telecommunications Equipment

Technology

RGS includes internet-related companies in the Consumer Services Software & Systems in the Technology
Industry.
RGS Sector

RGS Subsector

RGS Industry

Electronics

Electronic Components
Electronics
Semiconductors & Components
Technology: Misc
Production Technology Equipment

Information Technology

Computer Services Software &Systems
Computer Technology
Electronic Entertainment
Communications Technology
Electronic Entertainment

Telecommunication

Communications Technology
Telecommunications Equipment

Technology

FTSE Russell

16Proposed Structure

Create a new Consumer Digital Services Subsector (Level 4) within Consumer Discretionary to classify
companies involved in digital platforms that generate revenues from advertising, content delivery and othervirtual products related to consumers.

Discontinue the ICB Internet Subsector (Level 4) and reclassify internet-related companies as Consumer
Digital Services Subsector (Level 4).



Review companies currently included in the RGS Consumer Services Software & Systems and reclassify
those falling under the new Consumer Digital Services description accordingly.
Industry(Level 1)

Consumer
Discretionary

Supersector (Level 2)

Media

Sector (Level 3)

Subsector (Level 4)

Media

Cable Television Services
Consumer Digital Services
Diversified MediaEntertainment
Media Agencies
Publishing
Radio & TV Broadcasting

Supporting Analysis
Existing RGS and ICB categories do not adequately capture how the internet industry has evolved. When looking
at the underlying business activity of an internet-related company, it is noted that internet companies provide
services that are only monetized through the generation of advertising revenue. Such companies include
Facebook, Twitter, Google, and Yahoo.
19. Do you agree with the creation and proposed definition of a Consumer Digital Services Subsector(Level 4) under Consumer Discretionary?
Yes
No
Provide justification (open-end answer)
20. Do you agree with the proposed change to move companies currently classified by ICB as “Internet”
such as Google, Facebook and Yahoo from Technology to Consumer Discretionary?
Yes
No
Provide justification (open-end answer)

21. At what level do you believe Consumer Digital Services is best placed?
Subsector (Level 4)
Sector (Level 3)
Provide justification (open-end answer)

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17

VII. Implementation
We propose announcing consultation results in the first half of 2017 with an implementation plan based on thesignificance of change and client feedback.

22. What is your preferred naming convention for the four layers of the unified industry classification
structure?
ICB’s current method: Industry / Super Sector / Sector / Sub Sector.
RGS’s current method but with the addition of a fourth four category: Sector / Sub-sector / Super Industry /Industry
Numeric naming convention: Level 1 / Level 2 / Level 3 / Level 4.

23. The numeric code convention used by ICB and RGS includes digits with leading zeros. Do leading
zeros negatively impact the processing of the classification structures?
Yes
No
Do not know

24. Would an alphanumeric code convention (e.g. A100100100) be problematic to the processing of theclassification structures?
Yes
No
Do not know

For Questions 25-28, note your preferred advance notification period required to incorporate theproposed structural changes.
25. Changes to an ICB Industry / RGS Sector (e.g., addition of a new Real Estate category).
12 months
18 months
24 months
Other, please specify

26. Remapping of ICB Subsectors / RGS Industries (e.g., Airlines moving from Consumer Services to
Industrials).
12 months
18 months
24 months
Other, please specify

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18

27. Renaming of categories (e.g., ICB Oil & Gas renamed Energy; RGS Producer Durables renamed
Industrials).
12 months
18 months
24 months
Other, please specify

28. Code changes (e.g., changes to numeric sector codes in index files).
12 months
18 months
24 months
Other, please specify

29. Note the drivers of your advance notification period requirements:
 Open end answer

30. What information is required to help you transition to the new classification structure? Select all that
apply:
Mapping document from ICB and/or RGS to new classification structure
Mapping doc to convert historical index holdings to the new structure
Parallel index calculation for select indexes across three sector classifications (ICB, RGS and new
structure)
Historical performance calculated for the new Industry (Level 1) and Supersector (Level 2) categories

For Questions 31-32, how much index history, if any, do you require?
31. Index level performance history
None
1 year
5 years
10 years
Other (state preference)

32. Security level history
None
1 year

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19

5 years
10 years
Other (state preference)

FTSE Russell

20

Appendix
Table 1: Current ICB Structure
0001 Oil & Gas
Supersector
0500 Oil & Gas

Sector0530 Oil & Gas Producers
0570 Oil Equipment, Services & Distribution
0580 Alternative Energy

1000 Basic Materials
Supersector
1300 Chemicals

Sector1350 Chemicals

1700 Basic Resources

1730 Forestry & Paper
1750 Industrial Metals & Mining

1770 Mining

2000 Industrials
Supersector
2300 Construction & Materials

Sector2350 Construction & Materials

2700 Industrial Goods & Services

2710 Aerospace & Defense
2720 General Industrials
2730 Electronic & Electrical Equipment
2750 Industrial Engineering
2770 Industrial Transportation

2790 Support Services

3000 Consumer Goods
Supersector
3300 Automobiles & Parts

Sector3350 Automobiles & Parts

3500 Food & Beverage3530 Beverages

FTSE Russell

Subsector
0533 Exploration & Production
0537 Integrated Oil & Gas
0573 Oil Equipment & Services
0577 Pipelines
0583 Renewable Energy Equipment
0587 Alternative Fuels
Subsector
1353 Commodity Chemicals
1357 Specialty Chemicals
1733 Forestry
1737 Paper
1753 Aluminum
1755 Nonferrous Metals
1757 Iron & Steel
1771 Coal
1773 Diamonds & Gemstones
1775 General Mining
1777 Gold Mining
1779 Platinum & Precious Metals
Subsector
2353 Building Materials & Fixtures
2357 Heavy Construction
2713 Aerospace
2717 Defense
2723 Containers & Packaging
2727 Diversified Industrials
2733 Electrical Components & Equipment2737 Electronic Equipment2753 Commercial Vehicles & Trucks
2757 Industrial Machinery
2771 Delivery Services
2773 Marine Transportation
2775 Railroads
2777 Transportation Services
2779 Trucking
2791 Business Support Services
2793 Business Training & Employment Agencies
2795 Financial Administration
2797 Industrial Suppliers
2799 Waste & Disposal Services
Subsector
3353 Automobiles
3355 Auto Parts
3357 Tires
3533 Brewers
3535 Distillers & Vintners

21

3570 Food Producers
3700 Personal & Household Goods

3720 Household Goods & Home Construction

3740 Leisure Goods

3760 Personal Goods

3780 Tobacco
4000 Health Care
Supersector
4500 Health Care

Sector4530 Health Care Equipment & Services

4570 Pharmaceuticals & Biotechnology
5000 Consumer Services
Supersector
5300 Retail

Sector5330 Food & Drug Retailers
5370 General Retailers

5500 Media

5550 Media

5700 Travel & Leisure5750 Travel & Leisure6000 Telecommunications
Supersector
6500 Telecommunications
7000 Utilities
Supersector
7500 Utilities

Subsector
5333 Drug Retailers
5337 Food Retailers & Wholesalers
5371 Apparel Retailers
5373 Broadline Retailers
5375 Home Improvement Retailers
5377 Specialized Consumer Services
5379 Specialty Retailers
5553 Broadcasting & Entertainment
5555 Media Agencies
5557 Publishing
5751 Airlines
5752 Gambling
5753 Hotels
5755 Recreational Services
5757 Restaurants & Bars
5759 Travel & Tourism
Subsector
6535 Fixed Line Telecommunications
6575 Mobile Telecommunications

Sector7530 Electricity

Subsector
7535 Conventional Electricity
7537 Alternative Electricity
7573 Gas Distribution
7575 Multi-utilities
7577 Water

Sector8350 Banks
8530 Nonlife Insurance

8570 Life Insurance

FTSE Russell

Subsector
4533 Health Care Providers
4535 Medical Equipment
4537 Medical Supplies
4573 Biotechnology
4577 Pharmaceuticals

Sector6530 Fixed Line Telecommunications
6570 Mobile Telecommunications

7570 Gas, Water & Multi-utilities

8000 Financials
Supersector
8300 Banks
8500 Insurance

3537 Soft Drinks
3573 Farming, Fishing & Plantations
3577 Food Products3722 Durable Household Products3724 Nondurable Household Products3726 Furnishings
3728 Home Construction
3743 Consumer Electronics
3745 Recreational Products3747 Toys
3763 Clothing & Accessories
3765 Footwear
3767 Personal Products
3785 Tobacco

Subsector
8355 Banks
8532 Full Line Insurance
8534 Insurance Brokers
8536 Property & Casualty Insurance
8538 Reinsurance
8575 Life Insurance

228600 Real Estate8630 Real Estate Investment & Services
8670 Real Estate Investment Trusts

8700 Financial Services

8770 Financial Services

8980 Equity Investment Instruments
8990Nonequity Investment Instruments
9000 Technology
Supersector
9500 Technology

Sector9530 Software & Computer Services

9570 Technology Hardware & Equipment

FTSE Russell

8633 Real Estate Holding & Development
8637 Real Estate Services
8671 Industrial & Office REITs
8672 Retail REITs
8673 Residential REITs
8674 Diversified REITs
8675 Specialty REITs
8676 Mortgage REITs
8677 Hotel & Lodging REITs
8771 Asset Managers
8773 Consumer Finance8775 Specialty Finance8777 Investment Services
8779 Mortgage Finance8985 Equity Investment Instruments
8995 Nonequity Investment Instruments
Subsector
9533 Computer Services
9535 Internet
9537 Software
9572 Computer Hardware
9574 Electronic Office Equipment
9576 Semiconductors
9578 Telecommunications Equipment

23

Table 2: Current RGS Structure
01 Technology
RGS Subsector
0120 Electronics

0130 Information Technology

0140 Telecommunication

RGS Industry
0120463 Electronic Components
0120475 Electronics
0120476 Semiconductors & Components
0120643 Technology: Misc
0120738 Production Technology Equipment
0130439 Computer Services Software & Systems
0130449 Computer Technology
0130469 Electronic Entertainment
0140448 Communications Technology
0140849 Telecommunications Equipment

02 Health CareRGS Subsector
0210 Health Care Services

0220 Medical Equipment & Services

0230Pharmaceuticals & Biotech

RGS Industry
0210499 Health Care Services
0210503 Health Care Management Services
0210504 Health Care Facilities
0210639 Health Care: Misc
0220471 Medical Equipment
0220507 Medical & Dental Instruments & Supplies
0220622 Medical Services
0230412 Biotechnology
0230460 Pharmaceuticals

03 Consumer Discretionary
RGS Subsector
0310 Auto & Auto Parts

0320 Consumer Products

0330 Consumer Services

0340 Leisure0350 Media

0360 Retail

FTSE Russell

RGS Industry
0310340 Auto Parts
0310360 Automobiles
0310854 Auto Services
0320547 Luxury Items
0320450 Cosmetics
0320451 Consumer Electronics
0320470 Household Appliance0320501 Homebuilding
0320521 Household Equip & Products
0320523 Household Furnishings
0320640 Manufactured Housing
0320730 Photography
0320850 Textiles Apparel & Shoes
0320858 Toys
0330461 Education Services
0330495 Funeral Parlors & Cemetery0330638 Consumer Services: Misc
0330736 Printing and Copying Services
0330809 Rental & Leasing Services: Consumer
0330838 Storage Facilities
0330890 Vending & Catering Service
0340556 Leisure Time
0340804 Recreational Vehicles & Boats
0340434 Casinos & Gambling
0340514 Hotel/Motel
0340556 Leisure Time
0340810 Restaurants
0350301 Advertising Agencies
0350432 Cable Television Services
0350438 Diversified Media
0350480 Entertainment
0350740 Publishing0350760 Radio & TV Broadcasters
0360815 Diversified Retail0360834 Specialty Retail24

04 Consumer Staples
RGS Subsector
0410 Food/Beverage & Tobacco

0420 Personal Care/Drug & Grocery Stores

RGS Industry
0410305 Agriculture Fishing & Ranching0410405 Beverage Brewers & Distillers
0410410 Beverage: Soft Drinks
0410494 Foods
0410646 Fruit & Grain Processing
0410840 Sugar
0410856 Tobacco
0420637 Miscellaneous Consumer Staples
0420832 Personal Care
0420459 Drug & Grocery Store Chains

06 Energy
RGS Subsector
0610 Energy Equipment & Services
0620 Non-Renewable Energy

0630 Alternative Energy

RGS Industry
0610477 Energy Equipment
0610600 Oil Well Equipment & Services
0620605 Oil: Refining & Marketing
0620660 Offshore Drilling & Other Services
0620670 Oil: Crude Producers
0620700 Oil: Integrated
0620877 Gas Pipeline
0630435 Coal
0630478 Alternative Energy

07 Materials & Processing
RGS Subsector
0720 Chemicals and Synthetics

0730 Industrial Materials & Processes

0740 Metals & Minerals

0710 Building Materials & Services

0730 Industrial Materials & Processes

0740 Metals & Minerals

RGS Industry
0720433 Chemicals: Diversified
0720485 Fertilizers
0720833 Chemicals: Specialty
0720845 Synthetic Fibers & Chemicals
0730452 Diversified Materials & Processing
0730496 Forest Products
0730720 Paper
0740320 Aluminum
0740447 Copper
0740498 Gold
0740549 Precious Metals & Minerals
0740635 Metals & Minerals: Diversified
0740835 Steel
0710415 Building: Climate Control
0710420 Cement
0710427 Building: Roofing/Wallboard & Plumbing
0710430 Building Materials
0730442 Containers & Packaging
0730502 Glass
0730714 Paints & Coatings
0730733 Plastics
0730852 Textile Products
0740630 Metal Fabricating

08 Producer Durables
RGS Subsector
0810 Machinery

0820 Manufacturing & Production

FTSE Russell

RGS Industry
0810563 Machinery: Tools
0810570 Machinery: Agricultural
0810577 Machinery: Construction & Handling
0810579 Machinery: Engines
0810584 Machinery: Industrial
0810610 Machinery: Specialty
0820443 Construction
0820453 Diversified Manufacturing Operations
0820644 Producer Durables: Misc
0820650 Office Equipment & Supplies
0820734 Power Transmission Equip250830 Scientific Instruments & Services

0840 Transportation & Freight0850 Commercial Services

0830465 Scientific Instruments: Electrical
0830474 Scientific Instruments: Gauges & Meters
0830524 Scientific Instruments: Control & Filter
0830735 Scientific Instruments: Pollution Control
0840300 Aerospace
0840310 Air Transport
0840350 Commercial Vehicles & Parts
0840770 Railroad Equipment
0840800 Railroads
0840808 Commercial Services: Rental & Leasing
0840830 Shipping
0840860 Transportation Miscellaneous
0840865 Truckers
0850365 Back Office Support HR & Consulting
0850479 Engineering & Contracting Services
0850484 Environmental Maintenance & Security
Services
0850486 Forms and Bulk Printing Services
0850546 International Trade & Diversified Logistics

10 Financial Services
RGS Subsector
1010 Banks
1020 Consumer Finance & Credit Services

1030 Insurance

1040 Investment Banking & Brokerage Services

1050 Real Estate

1060 Real Estate Investment Trusts (REITs)RGS Industry
1010400 Banks: Diversified
1010820 Banks: Savings/Thrifts & Mortgage Lend
1020487 Commercial Finance & Mortgage Co
1020489 Financial Data & Systems
1020492 Consumer Lending
1030528 Insurance: Life
1030535 Insurance: Multi-Line1030542 Insurance: Property-Casualty
1040457 Diversified Financial Services
1040544 Asset Management & Custodian
1040823 Securities Brokerage & Services
1050801 Real Estate Services
1050802 Real Estate Holding and Development
1050803 Diversified Real Estate Activities
1060906 Equity REIT: Industrial
1060907 Equity REIT: Residential
1060908 Equity REIT: Retail1060909 Equity REIT: Lodging and Resorts
1060910 Equity REIT: Health Care
1060911 Equity REIT: Storage
1060912 Equity REIT: Office1060913 Equity REIT: Timber
1060914 Equity REIT: Infrastructure
1060915 Equity REIT: Other Specialty
1060916 Equity REIT: Diversified
1060930 Mortgage REIT: Residential
1060931 Mortgage REIT: Commercial
1060932 Mortgage REIT: Diversified

11 Utilities
RGS Subsector
1110 Utilities

FTSE Russell

RGS Industry
1110880 Utilities: Telecommunications
1110868 Utilities: Miscellaneous
1110870 Utilities: Electrical
1110875 Utilities: Gas Distributors
1110882 Utilities: Water

26

Table 3: Proposed New ICB Structure
Basic Materials
New Supersector (Level 2)
Basic Resources

New Sector (Level 3)
Industrial Materials

Industrial Metals & Mining

MiningChemicals

Chemicals

Consumer Discretionary
New Supersector (Level 2)
Automobiles & Parts

New Sector (Level 3)
Automobiles & Parts

Consumer Products & Services

Consumer Services

Household Goods & Home Construction

Leisure Goods

Personal Goods

Media

Media

Retailers

RetailersTravel & Leisure

Travel & Leisure

FTSE Russell

New Subsector (Level 4)
Forestry
Paper
Textile Products
Diversified Materials
Aluminum
CopperNonferrous Metals
Iron & Steel
Metal Fabricating
Diamonds & Gemstones
General Mining
Gold Mining
Platinum & Precious Metals
Chemicals & Synthetic Fibers
Chemicals: Diversified
Fertilizers
Specialty Chemicals
New Subsector (Level 4)
Auto Parts
Auto Services
Automobiles
Tires
Consumer Services: Misc.
Education Services
Funeral Parlors & Cemetery
Printing and Copying Services
Rental & Leasing Services: Consumer
Storage Facilities
Vending & Catering Service
Home Construction
Household Appliance
Household Equipment & ProductsHousehold Furnishings
Nondurable Household Products
Consumer Electronics
Photography
Recreational Products
Toys
Recreational Vehicles & Boats
Cosmetics
Luxury Items
Clothing & Accessories
Footwear
Cable Television Services
Consumer Digital Services
Diversified MediaEntertainment
Media Agencies
Publishing
Radio & TV Broadcasters
Apparel Retailers
Diversified Retailers
Home Improvement Retailers
Specialty Retailers
Casinos & Gambling
Hotels & Motels
Recreational Services

27

Restaurants & Bars
Travel & Tourism
Consumer Staples
New Supersector (Level 2)
Food, Beverage & Tobacco

New Sector (Level 3)
Beverages

Food Producers

Personal Care, Drug & Grocery StoresTobaccoPersonal Care, Drug & Grocery Stores

EnergyNew Supersector (Level 2)
EnergyNew Sector (Level 3)
Non-Renewable Energy

Renewable Energy
Financials
New Supersector (Level 2)
Banks
Financial Services

New Sector (Level 3)
Banks
Equity Investment Instruments
Finance & Credit Services

Investment Banking & Brokerage Services

Insurance

Health Care
New Supersector (Level 2)
Health Care

Non-equity Investment Instruments
Life Insurance
Nonlife Insurance

New Sector (Level 3)
Health Care Providers

Medical Equipment & Services

Pharmaceuticals & Biotechnology
Industrials
New Supersector (Level 2)
Construction & Materials

FTSE Russell

New Sector (Level 3)
Construction & Materials

New Subsector (Level 4)
Brewers
Distillers & Vintners
Soft Drinks
Farming, Fishing, Ranching & Plantations
Food Products
Fruit & Grain Processing
Sugar
TobaccoMiscellaneous Consumer Staple Goods
Drug Retailers
Food Retailers & Wholesalers
Personal Products
New Subsector (Level 4)
Coal
Integrated Oil & Gas
Offshore Drilling & Other Services
Oil Equipment & Services
Oil Refining and Marketing
Oil: Crude Producers
Pipelines
Alternative Fuels
Renewable Energy Equipment
New Subsector (Level 4)
Banks
Equity Investment Instruments
Consumer Lending
Financial Data & Systems
Mortgage Finance
Asset Managers & Custodians
Investment Services
Diversified Financial Services
Non-equity Investment Instruments
Life Insurance
Insurance Brokers
Property & Casualty Insurance
Reinsurance
Full Line Insurance
New Subsector (Level 4)
Health Care Facilities
Health Care Management Services
Health Care Services
Health Care: Misc.
Medical Supplies
Medical Services
Medical Equipment
Biotechnology
Pharmaceuticals
New Subsector (Level 4)
Building, Roofing/Wallboard & Plumbing
Building: Climate Control
Building Materials: Other
CementConstruction

28

Industrial Goods & Services

Aerospace & Defense
Electronic & Electrical Equipment

General Industrials

Industrial Engineering

Industrial Transportation

Support Services

Real Estate
New Supersector (Level 2)
Real Estate

New Sector (Level 3)
Real Estate Investment & Services
Development
Real Estate Investment Trusts

Technology
New Supersector (Level 2)
Technology

New Sector (Level 3)
Software & Computer Services
Technology Hardware & Equipment

Utilities
New Supersector (Level 2)
Electricity, Gas, Water & Multi-utilities

New Sector (Level 3)
Electricity
Gas, Water & Multi-utilities

FTSE Russell

Engineering & Contracting Services
Aerospace
DefenseElectrical Components
Electronic Equipment: Control & Filter
Electronic Equipment: Gauges & Meters
Electronic Equipment: Other
Electronic Equipment: Pollution Control
Containers & Packaging
Diversified Industrials
Glass
Paints & Coatings
Plastics
Machinery: Agricultural
Machinery: Construction & Handling
Machinery: Engines
Machinery: Industrial
Machinery: Specialty
Machinery: Tools
Airlines
Commercial Vehicles & Parts
Marine Transportation
Railroad Equipment
Railroads
Transportation Services
Trucking
Back Office Support, HR & Consulting
Business Training & Employment Agencies
Forms & Bulk Printing Services
Industrial Suppliers
Waste & Disposal Services
New Subsector (Level 4)Real Estate Holding and Development
Real Estate Services
Health Care REITs
Hotel & Lodging REITs
Industrial REITs
Residential REITs
Office REITs
Retail REITs
Other Specialty REITs
Storage REITs
Timber REITs
Infrastructure REITs
Diversified REITs
New Subsector (Level 4)
Computer Services
Software
Electronic Office Equipment
Computer Hardware
Production Technology Equipment
Semiconductors
Telecommunications Equipment
Electronic Components
New Subsector (Level 4)
Alternative Electricity
Conventional Electricity
Gas Distribution29

Telecommunications

Fixed Line Telecommunications
Mobile Telecommunications

Multi-Utilities
Water
Fixed Line Telecommunications
Mobile Telecommunications

Table 4: Proposed New ICB Subsector Definitions
Basic Materials
New Subsector (Level 4)
Aluminum

CopperDefinition
Companies that mine or process bauxite or manufacture and distribute aluminum bars, rods and otherproducts for use by other industries. Excludes manufacturers of finished aluminum products, such as siding,which are categorized according to the type of end product.
Companies primarily involved in the mining, extraction and distribution of copper and related minerals

Diamonds & Gemstones

Companies engaged in the exploration for and production of diamonds and other gemstones.

Diversified Materials

Companies involved in manufacturing a diversified range of materials (e.g., bauxite, abrasive materials andcomposite material)
Owners and operators of timber tracts, forest tree nurseries and sawmills. Excludes providers of finishedwood products such as wooden beams, which are classified under Building Materials. Also excludes timber
REITs, which are classified under Real Estate.
Companies engaged in the exploration, extraction or refining of minerals not defined elsewhere within the
Mining sector.
Prospectors for and extractors or refiners of gold-bearing ores.

Forestry

General Mining
Gold Mining
Iron & Steel

Metal Fabricating
Nonferrous Metals
Paper
Platinum & Precious Metals
Chemicals & Synthetic
FibersChemicals: Diversified

Companies that mine for iron ore and companies that produce, process, and distribute steel products. Thiscan include welding consumables, strip steel, rods, bars, wires, piping, tubing, rails, and structural products aswell as sheets and coils
Companies that manufacture and supply fabricated metal components such as, rings, piping materials,
hinges, springs, etc.
Producers and traders of metals and primary metal products other than iron, aluminum and steel. Excludes
companies that make finished products, which are categorized according to the type of end product.
Companies that manufacture and market paper products including office paper, cardboard, tissue paper,
newsprint, commercial pulp, etc.
Companies engaged in the exploration for and production of platinum, silver and other precious metals notdefined elsewhere.
Companies that manufacture and distribute chemical fibers for various applications
Companies that manufacture and market a diversified range of industrial chemicals

Fertilizers

Companies that manufacture and market nitrogen fertilizers and other agricultural chemicals

Specialty Chemicals

Companies that manufacture and market a specific type or group of chemicals elsewhere in the Chemicals
subsector
Companies that produce and distribute various textile products such as cotton yarns, denims, and otherfinished fabrics.

Textile Products

Consumer Discretionary
New Subsector (Level 4)
Auto Parts
Auto Services
Automobiles
Tires
Consumer Services: Misc.

Education Services
Funeral Parlors &CemeteryPrinting and Copying
Services
Rental & Leasing Services:
Consumer

FTSE Russell

Definition
Manufacturers and distributors of new and replacement parts for motorcycles and automobiles, such asengines, carburetors and batteries. Excludes producers of tires, which are classified under Tires.
Companies that provide assistance to individual vehicle owners
Makers of motorcycles and passenger vehicles, including cars, sport utility vehicles (SUVs) and light trucks.
Excludes makers of heavy trucks and makers of recreational vehicles (RVs and ATVs).
Manufacturers, distributors and re-treaders of automobile, truck and motorcycle tires.
Consumer Services companies that are not categorized in the Education Services, Funeral Parlors andCemeteries, Printing and Copying Services, Rental and Leasing Services, Storage Facilities or Vending andCatering Services categories
Companies that own and manage higher education systems, post-secondary degree programs or othereducational services
Companies that own and operate funeral homes, cemeteries, crematoriums and/or provide other funeralservices.
Companies specializing in printing, copying and/or similar solutions for individuals and small businesses
Companies that lease automobiles, appliances, electronics or furniture to consumers

30

Storage Facilities

Companies that own and operate storage facilities (does not include companies structured as REITs

Vending & Catering
Service
Cable Television Services

Companies that provide catering and food service and/or food ingredients to individuals or institutions

Consumer Digital Services

Companies involved in digital platforms that generate revenues from advertising, content delivery and othervirtual products related to consumers.
Companies that operate a diversified range of television, radio and other publishing operations (multi-media)

Diversified MediaEntertainment
Media Agencies

Publishing

Radio & TV Broadcasters
Clothing & Accessories

Consumer Electronics
Cosmetics
Footwear
Home Construction
Household Appliance
Household Equipment &Products
Household Furnishings
Luxury Items
Nondurable Household
Products
Photography
Recreational Products
Recreational Vehicles &
Boats
Toys

Companies that provide cable television subscriptions

Companies that provide various media services including feature films, music and television shows andstations
Companies that provide a wide range of marketing and public relations services such as promoting
advertising space in telephone and professional directories, analyzing market research and other various
marketing activities. Includes website design.
Companies that provide advertising and publishing services to customers in industrial, commercial, anddesign markets. This includes companies that publish books, magazines, comics, encyclopedias, financial
reports, journals and/or newspapers
Companies with principal activities that include operating commercial TV stations and/or radio broadcasting
Manufacturers and distributors of all types of clothing and accessories. Includes sportswear, sunglasses,
eyeglass frames, leather clothing and goods, and processors of hides and skins. Excludes jewelry, which iscategorized under Luxury Items
Companies involved in the application of technology and electronics to the consumer discretionary sector
Companies that produce and market make-up and fragrance products (perfume). Excludes personal careproducts, which are classified under Consumer Staples
Manufacturers and distributors of shoes, boots, sandals, sneakers and other types of footwear.
Constructors of residential homes, including manufacturers of mobile and prefabricated homes intended foruse in one place.
Companies that manufacture and market household electrical appliances.
Companies that manufacture and supply various household products. Includes manufacturers of gardening
tools, kitchen utensils, dishes and other home related products
Manufacturers and distributors of furniture, including chairs, tables, desks, carpeting, wallpaper and officefurniture.
Companies that manufacture and market jewelry, watches and gemstones.
Producers and distributors of pens, paper goods, batteries, light bulbs, tissues, toilet paper and cleaningproducts such as soaps and polishes.
Companies that produce and/or market professional and/or personal imaging products including digital
cameras and film cameras
Manufacturers and distributors of recreational equipment not classified in other "Leisure Goods" categories,
including Musical Instruments
Companies that design, manufacture and market recreation vehicles (RVs), motor-cycles or passenger boats

Apparel Retailers

Manufacturers and distributors of toys and video/computer games, including such toys and games as playing
cards, board games, stuffed animals and dolls.
Retailers and wholesalers specializing mainly in clothing, shoes, jewelry, sunglasses and other accessories.

Diversified Retailers

Retail outlets and wholesalers offering a wide variety of products including both hard goods and soft goods.

Home Improvement
RetailersSpecialty Retailers

Retailers and wholesalers concentrating on the sale of home improvement products, including garden
equipment, carpets, wallpaper, paint, home furniture, blinds and curtains, and building materials.
Retailers and wholesalers concentrating on a single class of goods, such as electronics, books, automotive
parts or closeouts. Includes automobile dealerships, video rental stores, dollar stores, duty-free shops andautomotive fuel stations not owned by oil companies. Excludes Apparel and Home Improvement Retailers
Providers of gambling and casino facilities. Includes online casinos, racetracks and the manufacturers ofpachinko machines and casino and lottery equipment.
Operators and managers of hotels, motels, lodges, resorts, spas and campgrounds.

Casinos & Gambling
Hotels & Motels
Recreational Services
Restaurants & Bars
Travel & Tourism

Providers of leisure facilities and services, including fitness centers, cruise lines, movie theatres and sports
teams.
Operators of restaurants, fast-food facilities, coffee shops and bars. Includes integrated brewery companies.
Excludes catering companies, which are classified as Vending & Catering Service.
Companies providing travel and tourism related services, including travel agents, online travel reservation
services, and companies that primarily provide passenger transportation, such as buses, taxis, passenger railand ferry companies.

Consumer Staples
New Subsector (Level 4)
Brewers

Definition
Manufacturers and shippers of cider or malt products such as beer, ale and stout.

Distillers & Vintners

Producers, distillers, vintners, blenders and shippers of wine and spirits such as whisky, brandy, rum, gin orliqueurs.

FTSE Russell

31

Farming, Fishing, Ranching& Plantations
Food Products

Sugar

Companies that grow crops or raise livestock, operate fisheries or own nontobacco plantations. Includes
manufacturers of livestock feeds and seeds and other agricultural products
Food producers, including meatpacking, snacks, fruits, vegetables, dairy products and frozen seafood.
Includes producers of pet food and manufacturers of dietary supplements, vitamins and related items.
Excludes producers of fruit juices, tea, coffee, bottled water and other non-alcoholic beverages, which areclassified under Soft Drinks.
Companies involved in the value-adding process of various "raw" or "unprocessed" agricultural products. May
also produce and market such products.
Manufacturers, bottlers and distributors of non-alcoholic beverages, such as soda, fruit juices, tea, coffee andbottled water.
Companies that grow, refine, process and distribute sugar

Drug Retailers

Operators of pharmacies, including wholesalers and distributors catering to these businesses.

Food Retailers &Wholesalers
Miscellaneous Consumer
Staple Goods
Personal ProductsSupermarkets, food-oriented convenience stores and other food retailers and distributors. Includes retailers of
dietary supplements and vitamins.
Includes Consumer Staples companies that are not classified in any other Consumer Staples industry

Fruit & Grain Processing
Soft Drinks

TobaccoMakers and distributors of toiletries and personal-care and hygiene products, including deodorants, soaps,
toothpaste, perfumes, diapers, shampoos, razors and feminine-hygiene products. Excludes makers ofcontraceptives other than oral contraceptives, which are classified under Pharmaceuticals.
Manufacturers and distributors of cigarettes, cigars and other tobacco products. Includes tobacco plantations.

EnergyNew Subsector (Level 4)

Definition

Coal

Companies that mine, process and market coal

Integrated Oil & Gas

Companies that engage in all three fields of petroleum production: Extraction (upstream), Transportation(midstream), and Refining and Marketing (downstream).
Companies that primarily explore and drill for oil and gas in offshore areas.

Offshore Drilling & Other
Services
Oil Equipment & Services
Oil Refining and Marketing

Suppliers of equipment and services to oil fields and offshore platforms, such as drilling, exploration, seismicinformation services and platform construction.
Companies primarily engaged in the refining and marketing of petroleum products (downstream).

Oil: Crude Producers

Companies engaged in the exploration for and drilling, production, and supply of crude oil on land

Pipelines

Operators of pipelines carrying oil, gas or other forms of fuel. Excludes pipeline operators that derive themajority of their revenues from direct sales to end users, which are classified under Gas Distribution.
Companies that produce alternative fuels such as ethanol, methanol, hydrogen and bio-fuels that are mainly
used to power vehicles, and companies that are involved in the production of vehicle fuel cells and/or thedevelopment of alternative fueling infrastructure.
Companies that develop or manufacture renewable energy equipment utilizing sources such as solar, wind,tidal, geothermal, hydro and waves.

Alternative Fuels

Renewable Energy
Equipment
Financials
New Subsector (Level 4)
Banks

Definition
Banks providing a broad range of financial services, including retail banking, loans and money transmissions.

Asset Managers &Custodians
Consumer Lending

Companies that provide custodial, trustee and other related fiduciary services. Includes mutual fundmanagement companies.
Companies that provide financial services to consumers including payday loans, student loans, automobileloans, etc.
Companies providing a diversified range of services such as investment banking, trading, and asset
management
Corporate closed-ended investment entities identified under distinguishing legislation, such as investment
trusts and venture capital trusts.
Companies that provide decision support tools for investment institutions and process credit, debit,commercial, and private label cards. Also includes companies that publishes credit and security ratings andthose that operate databases designed to enable credit granting and monitoring.
Companies providing a range of specialized financial services, including securities brokers and dealers, online
brokers and security or commodity exchanges.
Companies that provide mortgages, mortgage insurance and other related services

Diversified Financial
Services
Equity Investment
Instruments
Financial Data & Systems

Investment Services
Mortgage FinanceNon-equity Investment
Instruments

Insurance Brokers

Cash shells, Special Purpose Acquisition Company (SPACs), Non-corporate, open-ended investment
instruments such as open-ended investment companies and funds, unit trusts, ETFs and currency funds andsplit capital trusts.
Companies that provide a wide range of insurance products such as a combination of life, property/casualty,
and specialty insurance
Insurance brokers and agents

Life Insurance

Companies engaged principally in life and health insurance.

Full Line Insurance

FTSE Russell

32

Property & Casualty
Insurance
Reinsurance

Companies engaged principally in accident, fire, automotive, marine, malpractice and other classes of nonlife
insurance.
Companies engaged principally in reinsurance.

HealthCare
New Subsector (Level 4)
Health Care Facilities
Health Care Management
Services
Health Care Services

Health Care: Misc.
Medical Equipment
Medical Services
Medical Supplies
Biotechnology

Pharmaceuticals

Definition
Owners and operators of primary healthcare property, community hospitals, retirement homes, nursing
homes, and related medical businesses.
Companies that offers managed health care benefits and services (e.g., Health Management Organizations(HMO) including state sponsored programs
Companies that provide various specialized disease management services to physicians, health plans, andhospitals. Primary business lines in this category can also include general consultation services, paramedical
services, operation of health portals and distribution of health food products.
Includes Healthcare companies that are not classified in the Healthcare Facilities, Healthcare Management
Services or Healthcare Services
Manufacturers and distributors of medical devices such as MRI scanners, prosthetics, pacemakers, X-ray
machines and other non-disposable medical devices.
Companies that operate and manage medical labs and testing services.
Manufacturers and distributors of medical supplies used by health care providers and the general public.
Includes makers of contact lenses, eyeglass lenses, bandages and other disposable medical supplies.
Companies engaged in research into and development of biological substances for the purposes of drug
discovery and diagnostic development, and which derive the majority of their revenue from either the sale orlicensing of these drugs and diagnostic tools.
Manufacturers of prescription or over-the-counter drugs, such as aspirin, cold remedies and birth control pills.
Includes vaccine producers but excludes vitamin producers, which are classified under Food Products.

Industrials
New Subsector (Level 4)
Building,
Roofing/Wallboard &Plumbing
Building: Climate Control
Building Materials: Other
CementConstruction
Engineering & Contracting
Services
Aerospace

Airlines
Back Office Support, HR &Consulting
Business Training &Employment Agencies
Commercial Vehicles &PartsContainers & Packaging
DefenseDiversified Industrials
Electrical Components
Electronic Equipment:
Control & Filter
Electronic Equipment:
Gauges & Meters
Electronic Equipment:
Other

FTSE Russell

Definition
Companies that design, manufacture, market and/or install non-climate control systems and related products
such as siding, windows and water pipes.
Companies that design, manufacture, market and/or install air conditioning, heating and/or refrigeration
systems
Companies that provide materials to the building and construction industry, excluding air-conditioning,cement, heating, plumbing, roofing, and wall boards
Companies primarily engaged in manufacturing and distributing cement and cement-derived productsCompanies that provide construction and infrastructure development services to private and/or public sector
clients.
Companies that provide capital project planning and solutions. Includes engineering contracts, infrastructuredevelopment, bid preparation, interior enhancement designs and architects.
Manufacturers, assemblers and distributors of aircraft and aircraft parts primarily used in commercial or
private air transport. Excludes manufacturers of communications satellites, which are classified under
Telecommunications Equipment.
Companies that provides international and/or domestic passenger and cargo airline services
Companies that provide outsourced business operation services. This includes personnel services, consulting
services, and/ all other aspects of outsourced business support services not categorized elsewhere.
Providers of business or management training courses and employment services.
Companies that design, develop, manufacture, and distribute light, medium and heavy duty trucks and vans.
Also includes related aftermarket distribution of parts
Companies that may produces a wide range of packaging products and packaging related materials, including
cartons, plastic bottles, jars, glass bottles, aluminum cans, dispensing pumps, aerosol valves, etc.
Producers of components and equipment for the defense industry, including military aircraft, radar equipment
and weapons.
Companies engaged in three or more industrial business activities, none of which is the dominant businessline
Makers and distributors of electrical parts for finished products such as radios, televisions and other consumer
electronics. Includes makers of cables, wires, ceramics, transistors, and electric adapters
Companies primarily involved in providing mechanical and electronic security and/or filtration systems
Companies that design, manufacture and market products used to measure electric, gas, water and otherdata for use in a variety of industries
Companies that specialize in the development and production of electrical devices/components marketed tobusiness clients.

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Electronic Equipment:
Pollution Control
Forms & Bulk Printing
Services
Glass
Industrial Suppliers
Machinery: Agricultural
Machinery: Construction &Handling
Machinery: Industrial
Machinery: Engines
Machinery: Specialty
Machinery: Tools
Marine Transportation

Companies primarily engaged in the production of pollution control equipment for purification of air and liquids.
Also included are companies that provide services such as decontamination, solvent disposal management,
used oil collection, vacuum truck services and recycling
Companies that provide printed business products including forms, checks, labels and IDs
Companies that manufacture various structural glasses such as float glass, architectural glass, delicacy glass,automotive glass, and other glass products. Excludes glass containers/bottles prepared for other markets.
Distributors and wholesalers of diversified products and equipment primarily used in the commercial andindustrial sectors. Includes builders merchants.
Manufacturers and distributers of a range of farming equipment for irrigation, harvesting, plowing and otherprocesses
Companies that design, manufacture and market large-size industrial equipment for construction and ports.
Companies that design, develop, manufacture, sell, and support general industrial machines and parts. This
excludes all the other machinery subsectors specified
Companies that manufacture and distribute energy output devices and component parts, including diesel
engines and gas engines
Companies that design, manufacture and market a specific type or group of industrial machines and parts.
This excludes all the other Machinery industries categorized in the Machinery subsector.
Companies that manufactures and market value-adding equipment for various heavy industries

Paints & Coatings

Providers of on-water transportation for commercial markets, such as container shipping. Excludes ports,
which are classified under Transportation Services, and shipbuilders.
Companies that manufacture and distribute paint, material coatings, and resins

Plastics

Companies that manufacture and market plastic products or chemicals used to make plastic

Railroad Equipment

Companies that manufacture, supply and distribute railroad supplies

Railroads

Companies that operate railway systems for transporting goods and passengers

Transportation Services

Companies providing services to the Industrial Transportation sector, including companies that manage
airports, train depots, roads, bridges, tunnels, ports, and providers of logistic services to shippers of goods.
Includes companies that provide aircraft and vehicle maintenance services.
Companies that provide commercial trucking services. Excludes road and tunnel operators, which areclassified under Transportation Services
Providers of pollution control and environmental services for the management, recovery and disposal of solidand hazardous waste materials, such as landfills and recycling centers. Excludes manufacturers of industrial
air and water filtration equipment, which are classified under Industrial Machinery.

Trucking
Waste & Disposal Services

Real Estate
New Subsector (Level 4)Real Estate Holding andDevelopment
Real Estate Services
Diversified REITs
Health Care REITs

Definition
Companies that invest directly or indirectly in a variety of types of properties without a concentration on any
single typeCompanies that provide services to real estate companies but do not own the properties themselves. Includes
agencies, brokers, leasing companies, management companies and advisory services.
REITS that invest in a combination of other defined REIT categories

Hotel & Lodging REITs

REITs that primarily invest in health care facilities including hospitals, nursing homes and assisted living
propertiesREITS that primarily invest in hotels, motels, resorts or other lodging properties

Industrial REITs

REITs that primarily invest in industrial properties including industrial warehouses and distribution properties

Infrastructure REITs

REITS that primarily invest in infrastructure assets including roads, bridges, tunnels, airports, power
generation, fuels, pipelines, water and waste management, and communication assets
REITs that primarily invest in office properties

Office REITs
Other Specialty REITs

Storage REITs

REITs that primarily invest in any single type of facility or property not specifically defined within another RGS
REITs industry
REITs that primarily invest in residential properties including manufactured homes, multifamily homes,
apartments, and student housing properties
REITs that primarily invest in retail properties including malls, shopping centers, neighborhood and community
shopping centers, strip malls, free standing stores, and factory outlets
REITs that primarily invest in public self-storage properties

Timber REITs

REITS that primarily invest in timberland and timber-related products and activities

Residential REITs
Retail REITs

Technology
New Subsector (Level 4)
Computer Hardware

FTSE Russell

Definition
Manufacturers and distributors of computers, servers, mainframes, workstations and other computer hardware
and subsystems, such as mass-storage drives, mice, keyboards and printers.

34

Computer Services

Electronic Components
Electronic Office
Equipment
Production Technology
Equipment
Semiconductors

SoftwareTelecommunications
Equipment

Companies that provide consulting services to other businesses relating to information technology. Includes
providers of computer-system design, systems integration, network and systems operations, data
management and storage, repair services and technical support.
Companies involved in the application of high-technology parts to finished products, including printed circuitboards. Excludes communications-related equipment.
Manufacturers and distributors of electronic office equipment, including photocopiers and fax machines.
Manufactures of tools and/or devices that are used in the creation of semiconductors, lasers, photonics,
wafers, and other high-technology components.
Producers and distributors of semiconductors and other integrated chips, including other products related tothe semiconductor industry, such as semiconductor capital equipment and motherboards. Excludes makers
of printed circuit boards, which are classified under Electronic Components
Publishers and distributors of computer software for home or corporate use. Excludes computer gameproducers, which are classified under Toys.
Makers and distributors of high-technology communication products, including satellites, mobile telephones,
fibers optics, switching devices, local and wide-area networks, teleconferencing equipment and connectivity
devices for computers, including hubs and routers.

Utilities
New Subsector (Level 4)
Alternative Electricity

Multi-Utilities

Definition
Companies generating and distributing electricity from a renewable source. Includes companies that produce
solar, water, wind and geothermal electricity.
Companies generating and distributing electricity through the burning of fossil fuels such as coal, petroleum
and natural gas, and through nuclear energy.
Distributors of gas to end users. Excludes providers of natural gas as a commodity, which are classified under
the Oil & Gas industry.
Companies that engage in multiple utilities that have no particular dominance over one another.

Water

Companies providing water to end users, including water treatment plants.

Fixed Line
Telecommunications

Providers of fixed-line telephone services, including regional and long-distance. Includes companies thatprimarily provides telephone services through the internet. Excludes companies whose primary business isInternet access
Providers of mobile telephone services, including cellular, satellite and paging services. Includes wirelesstower companies that own, operate and lease mobile site towers to multiple wireless service providers.

Conventional Electricity
Gas Distribution

MobileTelecommunications

For more information about our indexes, please visit ftserussell.com.
© 2016 London Stock Exchange Group plc and its applicable group undertakings (the “LSE Group”). The LSE Group includes (1) FTSE
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All information is provided for information purposes only. Every effort is made to ensure that all information given in this publication is accurate,
but no responsibility or liability can be accepted by any member of the LSE Group nor their respective directors, officers, employees, partners
or licensors for any errors or for any loss from use of this publication or any of the information or data contained herein.
No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or
representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Russell Indexes or thefitness or suitability of the Indexes for any particular purpose to which they might be put.
No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing
in this document should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors,
officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in
any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an
index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon
without obtaining specific legal, tax, and investment advice from a licensed professional.

FTSE Russell

35

No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise, without prior written permission of the applicable member of the LSE Group. Use and distribution of the
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and/or their respective licensors.
Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index returns shown may not
represent the results of the actual trading of investable assets. Certain returns shown may reflect back-tested performance. All performance
presented prior to the index inception date is back-tested performance. Back-tested performance is not actual performance, but ishypothetical. The back-test calculations are based on the same methodology that was in effect when the index was officially launched.
However, back- tested data may reflect the application of the index methodology with the benefit of hindsight, and the historic calculations ofan index may change from month to month based on revisions to the underlying economic data used in the calculation of the index.
This publication may contain forward-looking statements. These are based upon a number of assumptions concerning future conditions that
ultimately may prove to be inaccurate. Such forward-looking statements are subject to risks and uncertainties and may be affected by various
factors that may cause actual results to differ materially from those in the forward-looking statements. Any forward-looking statements speak
only as of the date they are made and no member of the LSE Group nor their licensors assume any duty to and do not undertake to update
forward-looking statements.

FTSE Russell

36About FTSE Russell
FTSE Russell is a leading global provider of benchmarking, analytics and datasolutions for investors, giving them a precise view of the market relevant to theirinvestment process. A comprehensive range of reliable and accurate indexes
provides investors worldwide with the tools they require to measure andbenchmark markets across asset classes, styles or strategies.
FTSE Russell index expertise and products are used extensively by institutionaland retail investors globally. For over 30 years, leading asset owners, asset
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FTSE Russell is focused on applying the highest industry standards in index
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