BrandZ™ Portfolios display resilience during volatility
Valuable brands deliver superior shareholder returns
Strong brands provide stock market resilience during periods of volatility, providing a reliable, positive return on money invested to build valuable brands. When turbulence drives markets down, strong brands decline more slowly, and when markets recover, strong brands rebound more quickly.
That is the premise for investing in strong brands. And this year’s unprecedented Covid-19 stock market swings provided extreme conditions to test it. During the five weeks from February 14 to March 20, when the MSCI World Index dropped 75 percent and the S&P 500 dropped 51 percent, the BrandZ™ Strong Brands Portfolio dipped just 42 percent, and the BrandZ™ Powerful Brands Top 10 Portfolio dipped only 37 percent.
Since just prior to the Global Recession, during the period between April 2006 and April 2020, the BrandZ™ Strong Brands Portfolio increased 172.9 percent, and the BrandZ™ Powerful Brands Top 10 Portfolio increased 285.2 percent. Over the same period, the MSCI World Index increased just 45.6 percent and the S&P increased only 120 percent.
In concrete terms, $100 invested in 2006 would be worth $146 today based on the MSCI World Index growth rate, and $220 based on the S&P 500 growth rate. That $100 invested in the BrandZ™ Strong Brands Portfolio would be worth $273. And invested in the BrandZ™ Powerful Brands Top 10 Portfolio, that $100 would have more than tripled in value to $385. These results demonstrate the investment reliability of strong brands and the way that they deliver superior returns to shareholders.