Why Intangible Assets Now Drive Stock Market Returns

A landmark study covering nearly 60 years of market data (1963–2022) demonstrates a major shift in how company value and investor returns should be understood. The research shows that intangible investment—in assets such as intellectual property, software, data, R&D, and brand equity—has become a stronger predictor of stock returns than long-trusted metrics like price-to-book ratios or profitability (ArXiv, Wiley).

For investors, this is a game-changer:

• Traditional valuation models fall short if they don’t account for the growth and defensibility of intangibles.

• Intangible-rich companies consistently outperform, with these assets proving to be the true drivers of long-term market value.

• Portfolio strategy must adapt: weighting investment decisions toward businesses with strong intangible asset strategies—protected, scalable, and aligned with market needs—improves the potential for superior returns.

While balance sheets still underreport them, intangibles are now the core engine of shareholder value creation. Investors who recognise and evaluate them effectively will be better positioned to capture future growth.