Large gains from ‘brand’ investing

Investors would have seen a 97% return between 2007-2015 had they invested in an index related to the brand value of companies, the creators of the index claim.

This compares to the average return of 49% for index funds linked to the S&P 500.

The Solactive BrandFinance European Leaders Select 30 Index, and a low-risk variation of it, are launched by Frankfurt-based Solactive, an index provider, and BrandFinance, a brand consultant and valuation specialist.

The firms say there is a strong link between brand value and stock market performance due to a link between a company’s brand, its pricing premium, customer loyalty and market share.

Brand Finance said intangible assets – such as brand – account for 47% of a company’s total global enterprise value and 52% of total European enterprise value.

“The brands selected for inclusion within the two indices are a clear indication that properly managed brands can become solid investment opportunities,” the firms say.

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