Investing in the BRNDZ you know

We buy and use certain brands every day… The companies that produce them are household names that shape our everyday lives. So why don’t we invest in these companies? That simple question lies at the heart of the Λnßro World’s Biggest BRNDZ AMC, a USD-based actively managed certificate (AMC), a listed global equity portfolio now available on Mesh.trade.

BRNDZ provides investors with exposure to companies that have demonstrated proven success and longevity over time. The underlying is made up of the brands you use and buy into every day, explains Λnβro Chief Investment Officer Craig Antonie. “It’s the likes of Apple, Microsoft, Google, Netflix… They are the world’s biggest brands by brand value,” he says.

Brand value is the key indicator here. “We didn’t want to just invest in the world’s top 100 companies based on market cap,” says Λnβro CEO Justiné Brophy. “We wanted to base this portfolio on the value of the brands, because it’s the brand itself – rather than the company’s market cap – that creates the appeal, the sales, and the sustained loyalty among consumers. We’re looking at global companies and brands that people understand, recognise and use on a daily basis.”

In formulating the World’s Biggest BRNDZ AMC, Λnßro developed a model that weighted the world’s 100 biggest brands by value. They’re household names, from Google to Coca-Cola, Apple, and dozens more, spread across multiple industry sectors.

“Brand valuation is based on brand appeal, which lends itself to trust and reliability amongst the people who use and consume the product or service,” says Brophy. “That loyalty creates longevity for the business, which gives the businesses flexibility on their balance sheet because the cash flows are strong and recurring. And because of those strong balance sheets, these companies are able to ride through economic cycles with relative ease, ultimately coming out far stronger on the other side.”

“When we were developing BRNDZ we did extensive back-testing to see how it would have performed over time,” says Antonie. “And while past performance is no guarantee of future returns, the portfolio’s retrospective performance was, by some distance, better than the S&P 500.”

During the development phase, the Λnβro team also noticed how brand value drives the investment themes of the day, giving an interesting indication of where the world is and where it’s going. “If you look back 40 or 50 years ago, the biggest brands at the time were fossil fuel companies, industrial conglomerates, car manufacturers, and so on,” says Brophy. “But the world has changed. Over time, those brands have become less and less important, while others – like Microsoft, Netflix and Tesla – have grown incrementally in size and value over the past 20 to 30 years, to the point where they now dominate the market.”

With that in mind, Λnβro changes the constituents of the BRNDZ portfolio as the market changes. “We rebalance the portfolio once a year,” says Brophy. “We’ll rerun the model and redo our scans, and some companies will fall out of the portfolio while new ones come in. It’s a diversified portfolio, so there are some big brands that we may not be all that familiar with, but which are huge in markets like China, India, Korea or South America. Those markets are enormous, and BRNDZ gives you exposure to them.”

The BRNDZ portfolio offers internationally-listed exposure, targeting better performance than the S&P 500. As the fund’s Asset Detail page emphasises, the primary aim of the AnBro World’s Biggest BRNDZ Portfolio is to deliver capital growth by investing in globally recognised brands with proven longevity and success over time. In many cases, these are companies that are well known to us. We use or interact with them on a daily basis and our lives are intricately intertwined with them.

“With that said,” Antonie concludes, “the BRNDZ portfolio is most appropriate for more conservative investors who are looking for something that is visible, tangible, and easy to access. It caters to investors looking for consistency and growth over time.”

• Find out more about the World’s Biggest BRNDZ AMC, now available for investors on Mesh.trade.