Weekly Reputation Index Metrics
At the close of trading January 29, 2016, REPUVART and REPUVAR stood at 3071.12 and 2487.59 respectively. Over the past four weeks, the former has changed by -7.81%, while the latter has changed by -7.92%. The benchmark S&P500 Composite Index stood at 1689.99 (31 Dec 2001=1000) and has changed over the past four weeks by -5.07%. The current calendar year spread between REPUVAR and the S&P500 is -2.85%.
Over the trailing twelve months, REPUVART and REPUVAR have, respectively, changed by -16.40% and -17.70% respectively; the S&P500 Composite Index has changed by -4.01%. The trailing 12-month spread between REPUVAR and the S&P500 is -13.69%.
Over the trailing 36 months, the REPUVART and REPUVAR have changed by -7.72% and -12.74% respectively; the S&P 500 Composite Index has changed by 28.68%.
The 4-week, trailing 12-month, and trailing 36-month returns for REPUSPX are -9.50%, -17.02%, and 20.34% respectively. The trailing 12-month spread between REPUSPX and the S&P500 is -13.02%.
The spreads between the S&P500-only index informed by reputation metrics, REPUSPX, and the broad market index informed by reputation metrics, REPUVAR, for the calendar year and for the trailing twelve months respectively are -1.58% and 0.67%.
Side Note: A description of the portfolio constituents and historical returns data from December 31, 2001 can be obtained on request from Technology Option Capital, its manager. Click Here.
BackgroundThe RepuStars® Variety Corporate Reputation Index calculated by S&P/Dow Jones Indexes is the first-ever composite equity index based on a quantitative value strategy informed by the Steel City Re Reputational Value Metrics. The metrics comprise non-financial indicators of reputational value (RVM) and ranking (CRR). These are the same metrics that power the reputation controls provided by Consensiv, and the league table of reputational value, the Consensiv 50, published periodically on the Society's website (click here), and elsewhere.
The RepuStars Variety Corporate Reputation Index has two versions: a total returns index and a price index, whose ticker symbols are, respectively, REPUVART and REPUVAR. Click on the ticker names for real time quotes.
The RepuStars Variety Corporate Reputation Index tracks up to 57 company stocks that appear to be underpriced relative to Steel City Re’s proprietary Reputational Value Metrics™, which track 7400 companies weekly. The principles behind measuring reputational value are described in the book, Reputation, Stock Price, and You: Why the market rewards some companies and punishes others (2012, Apress).
The RepuStars indices are reconstituted annually in the first week of January and posted by S&P/Dow Jones Indexes in the third week. The Indices were last reconstituted at the close of the markets 15 January 2016.
REPUSPX is a pocket index with portfolio constituents being selected algorithmically by the same criteria as the constituents for REPUVAR and REPUVART, except that the field of eligible companies is limited to constituents of the S&P500 composite equity index. Click here for an analysis of periodic returns.
The strategy used to pick the constituent members of REPUSPX, REPUVAR and REPUVART is discussed in the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (Apress, 2012). (Link below). Briefly, the design of the portfolio is governed by the theory that sometime over the course of the forward twelve months from portfolio construction, 3rd week of January in the current application, equity investors will come to appreciate the value implied by the reputation metrics.
Reputation, Risk and FinanceReputation management through superior control of a company's intangible assets may be one of the best paths to value creation today. If it is not on your agenda, perhaps it should be. Here are several things you can do right now to start creating value for your organization:
1. Become better informed. Participate in our regular Mission Intangible Monthly Briefings held on the second Friday of every month, read the book, Reputation, Stock Price and You: Why the market rewards some companies and punishes others (2012) or its predecessor, Mission: Intangible. Managing risk and reputation to create enterprise value (2010), available at the IAFS Store, specialty finance sector retailers, or other leading online book retailers.
Society and engage.
2. Join our community on Linked-In and stay in the information flow and/or follow Twitter missives at #ReputationRisk.