Strong, valuable brands deliver superior shareholder value
BrandZ™ Indonesia portfolio outperforms stock market
Strong, valuable brands not only drive sales volume and market share growth, but also generate superior returns for shareholders. A stock portfolio comprising the Top 50 Most Valuable Indonesian Brands increased 23 percent between August 2015 and the end of June 2016.
During that same period, the Jakarta Stock Exchange Composite Index (JCI), which tracks the Indonesia Stock Exchange, grew by 17.1 percent. To put that another way, $1,000 invested last August would now be worth $1,230 if placed with the Top 50 strongest brands, and $1,171 if it simply tracked the JCI.
This year of data from Indonesia exemplifies what has been learned over a decade of BrandZ™ valuing strong brands from around the world. Had someone invested $100 in the BrandZ™ Top 100 global brands in 2006, they would have generated a return of $105 by 2016. During that same period, they would have made only $61 on the S&P 500 and just $21 on the MSCI World Index. In times of economic downturn, strong and average brands all tend to lose value in their share price, but often fall less sharply. When good times return, strong brands recover far more rapidly than weaker brands.
Marketing and brand building are not, therefore, a cost center or a luxury; they are one of the most important investments a company can make in its long-term financial success and driving superior shareholder return.