Investment success requires a well-defined “circle of competence”. At AXIAM, we start by looking at companies that own strong brands and then apply other financial criteria to short list our favourites. One of the main reasons for this approach is that companies that own strong brands tend to be resilient, especially in times of economic crisis. We call this attribute “ brand resilience ”.
The value of a brand can be determined in many ways and we therefore use an independent and rigorous means of doing the evaluation to provide us with global brand values and rankings on an annual basis. WPP Millward Brown publishes the BrandZ Top 100 Report annually. This report contains global brand rankings and values for the world’s top 100 most valuable brands. This 3rd party, independent report is the:
Economic Crisis, Brand Resilience and Investing
Brand resilience is evident throughout the economic cycle because brands have the following characteristics:
Brands tend to outperform major indexes
Brands decline less in an economic crisis
Source: BrandZ Report 2010
Brands recover quicker after an economic crisis
After the same economic crisis in 2008/9, strong brand resilience was also proven when the BrandZ Top 100 recovered quicker than the S&P 500. (See the graph in point 2 above)
We find that companies with strong brands that have high consumer loyalty and provide for basic human needs, tend to continue to grow and deliver profits on an ongoing basis regardless of the economic situation.
At AXIAM, we buy shares in companies, irrespective of their geography, that have great brands that are known, loved and used around the world daily and we keep them for a long time. Sign up to our newsletter or follow us on Twitter to learn more about investment in the best global brands or contact our fund management team to invest.