The Global Industry Classification Standard® (GICS®) assigns companies to business classifications, such as the Consumer Staples sector, according to their principal business activities. The sector is the first level of the fourtiered, hierarchical industry classification system that includes 11 sectors, 24 industry groups, 69 industries, and 158 sub-industries. The GICS assignment system uses quantitative and qualitative factors, including revenues, earnings, and market perception. GICS was developed in 1999 and is jointly managed by S&P Dow Jones Indices and MSCI.
The Consumer Staples sector comprises companies primarily engaged in:
- Food and staples retailing and distribution, such as owners and operators of hypermarkets, super centers, and pharmacies;
- Producing food, beverage, and tobacco products; and
- Manufacturing household and personal products, such as detergents, soaps, diapers, cosmetics, and perfumes.
The S&P 500® Consumer Staples includes all companies in the S&P 500 that are assigned to the Consumer Staples sector by GICS. Created in 1957, the S&P 500 was the first broad U.S. market-cap-weighted stock market index. Today, it is the basis of many listed and over-the-counter investment instruments.
The Consumer Staples sector is the seventh most heavily weighted of the 11 sectors within the S&P 500. As of Dec. 31, 2018, the sector represented 7.41% of the S&P 500 (see Exhibit 2).
There is a lower exposure to Consumer Staples in the mid- and small-cap indices, with the tenth-heaviest sector weight in the S&P MidCap 400® and eighth-heaviest in the S&P SmallCap 600®, at 2.94% and 3.58%, respectively. Overall, in the S&P Total Market Index, which consists of over
3,800 stocks—including those in the S&P 500, S&P MidCap 400, S&P SmallCap 600, and micro caps—Consumer Staples was the seventh largest sector, with 136 securities and a weight of 6.64%.
Thirty-three companies, with a total float-adjusted market capitalization of USD 1,558.02 billion, comprised the S&P 500 Consumer Staples as of Dec.31, 2018. The two largest companies in the sector were Procter & Gamble (PG) and Coca-Cola Co (KO), with float-adjusted market caps of USD 229.01 billion and USD 181.39 billion, translating to S&P 500 weights of 1.09% and 0.86%, respectively. There were no Consumer Staples companies in the top 10 constituents of the S&P 500—Procter & Gamble ranked as the 14th largest. The mean market cap of S&P 500 Consumer Staples stocks was USD 47.21 billion, the median market cap was USD 22.97 billion, and the minimum market cap was USD 2.96 billion. The top 10 Consumer Staples holdings made up 73.78% of the sector. Exhibit 4 shows that the Consumer Staples sector was the third most concentrated in its top 10 components among the 11 GICS sectors.