Revisiting Earnings Acceleration As a Source of Diversifying Excess Returns
Is earnings acceleration an underused source of diversification and excess return? See what the new data shows.
Earnings acceleration—a change in the velocity of growth—indicates something is affecting a company’s business prospects. Identifying that force has been a cornerstone of our growth investment process for more than 30 years.
Our Global Growth Equity Desk expanded the scope of analysis to determine the continued viability of earnings acceleration as a potential source of significant, durable and diversifying excess returns. Does the data still stand up?
- Percent of companies with accelerating earnings over time
- Distribution of accelerating companies by sector
- Excess returns over MSCI ACWI Index
- Excess returns by region and decile
- Correlation of an earnings acceleration portfolio to three equity factors: momentum, value and size