This free study of investment applications for corporate governance ratings produced by GMI predecessor firm The Corporate Library showed outperformance in 2003-2010 for three hypothetical portfolios benchmarked to the Russell 1000. The study found the highest level of outperformance—275 annualized basis points—for the portfolio applying the strictest governance screens.
Why download the study?
- Previous research on the relationship of governance ratings systems to investment performance has shown mixed results, and the significance of particular governance features to equity returns is widely debated.
- This study, however, suggests that The Corporate Library’s ratings system—focused on the identification of agency problems rather than supposed best practices—can contribute significantly to alpha generation.
Download the free study, “The Corporate Library’s Governance Ratings and Equity Returns" by filling out the form below.