- Topics overview
- 3D Printing
- Disruptive Technology
- Global Gender Diversity
- Global Family Companies
- Robotics & Drones
- Swiss Low-Volatility
- Commodities (CMCI)
- Swiss Family Companies
Solactive Swiss Family Owned Companies Index
Families: a success factor and return generator
UBS Open End PERLES on the Solactive Swiss Family Owned Companies Index
I. Model for success
At the latest since the global financial crisis the standing of family-owned companies on the capital market has grown considerably. Stability and resilience are namely the decisive characteristics of the species, meaning that family-owned companies think in terms of generations and not months. The Solactive Global Family Owned Companies Index was launched in 2015 to raise investor awareness of this highly promising investment theme (ubs.com/global-family-companies). Now there is a Swiss version of this successful concept, namely the Solactive Swiss Family Owned Companies Index.
II. Unearthing the secret to their success
A study by UBS Global Research (source: "Q-Series - Why do Family-Controlled Public Companies Outperform? The Value of Disciplined Governance", September 29, 2016) highlights the advantages of this ownership structure. Firstly, companies controlled by families are more profitable and, secondly, their share prices are less volatile than their peers in global large cap indexes. UBS Global Research believes that more efficient governance and disciplined cost management are the main reasons why family-controlled companies outperform their peers. Rigorous succession planning also plays a big role. The world’s 500 largest family-owned companies are being run by the fourth generation on average. That builds trust for the future.
III. Quiet champions in one package
The University of St. Gallen is also deeply interested in this subject. It even maintains a research and education center on family businesses. Together with the consulting firm EY (Ernst & Young), the St. Gallen researchers have launched the Global Family Business Index comprising the world’s 500 largest family-owned companies by sales. Listed and unlisted companies are treated differently, however. Listed companies only count as family-owned if one family holds at least 32 percent of their voting rights. All members of the Solactive Swiss Family Owned Companies Index meet the condition.
Opportunities & Risks