China 2015: OVERVIEW |Stock portfolios of the most valuable Chinese brands outperform market
Two portfolios of the BrandZTM Most Valuable Chinese Brands 2015 significantly outperformed the MSCI China, a weighted index of Chinese stocks.
These results affirm (1) that valuable brands deliver superior returns; and (2) the investments brands make to build value by being meaningfully different are measurably rewarded in the stock market.
Over the 51 months between July 2010 and October 2014, the MSCI increased 4 percent. In contrast, the BrandZTM China Top 100 Portfolio (all of the Top 100 Most Valuable Brands) appreciated 32 percent.
In addition, the BrandZ China Top Brands by Brand Contribution Portfolio grew almost 85 percent during the same period. This portfolio comprises brands with the highest brand contribution scores. Brand contribution is a measurement of brand strength, the influence of brand alone on earnings, with financial and other factors stripped away.
In concrete terms, $100 invested in the MSCI in July 2010 would be worth $104 today. That $100 invested in the BrandZTM China Top 100 Portfolio would be worth $132. If invested in the BrandZTM China Top Brands by Brand Contribution Portfolio, $100 would be worth $185.
This important relationship between brand value and strong returns is becoming even more critical in China as the country transitions to a more market-driven economy, brands become global competitors and investors expect results.