Design Impacts Stock Market Performance

Companies recognised as effective users of design strongly outperform their peers on the stock market.

That is the key finding of a ground-breaking study which has tracked a total of 166 design-led companies over ten years of UK share price activity.

A group of 63 companies, grouped into a 'Design Portfolio' for their consistent showing in various design award schemes, outperformed both the FTSE All Share and FTSE 100 indices by around 200% between 1994 and 2003, the study reveals.

The group maintained its lead during the long bull market period from 1995 to 2000, but also in the subsequent bear market, which lasted until 2003. A further Emerging Portfolio of 103 companies, whose awards performance approaches that of the Design Portfolio, enjoyed a similar level of out-performance over the FTSE indices.

The study, which can be downloaded below:

  • Provides a comprehensive performance commentary on the two portfolios, complete with graphs
  • Explains the method for selecting the companies and managing and tracking the portfolios
  • Details the award schemes drawn on by the research
  • Outlines earlier, smaller-scale, studies on the link between design and stock market returns
  • Lists the companies featured in each portfolio.

The Design Council, which commissioned the study, is now working with FTSE Group to create a design index based on this study, to be launched later this year. The index will measure performance of design-led companies on an on-going basis.

Reprinted with permission of the British Design Council

Download Impact of Design on Stock Market Performance February 2004:
impact2004.pdf

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