The empirical case for quality investing: why highquality businesses outperform, how to identify them, and why the market consistently undervalues them.
It is our pleasure to share with you an insightful white paper, “Why Quality Matters”, produced by Guinness Global Investors.
This paper presents both the empirical and theoretical case for quality as an investment approach. It explores how quality companies are defined, what distinguishes them in practice, and why their characteristics have historically translated into superior risk-adjusted returns over time.
The analysis draws on FactSet data covering the period from 1991 to 2025, providing a comprehensive examination of the long-term benefits of investing in high-quality businesses.
The Evidence Behind Quality Investing
Defining Quality
- What characterises a high-quality company and how these businesses can be identified in practice.
Returns & Growth
- Why high and persistent returns on capital can support durable growth and long-term value creation.
Long-Term Evidence
- What FactSet data from 1991–2025 reveals about the historical returns, volatility and risk-adjusted performance of quality companies.
Strength & Resilience
- The importance of strong balance sheets and how quality businesses have historically behaved during challenging market environments.
IMPORTANT INFORMATION
- This is a marketing communication. Please refer to the prospectus, supplement, KIDs and KIIDs for the Funds (available on Guinness website), which contain detailed information on their characteristics and objectives and full information on the risks, before making any final investment decisions.
- The Guinness Global Equity Income Fund and Guinness Global Innovators Fund are equity funds.
- The Funds are actively managed with the MSCI World Index used as a comparator benchmark only. The Funds invest primarily in global equities which are selected on the basis of persistently high returns on capital and strong balance sheets.
- Past performance is not a reliable indicator of future results. This document is provided for informational purposes and does not constitute investment advice.
- The analysis uses data from FactSet spanning the period 1991–2025. All performance data is in USD on a total return basis.
