JUST Chart of the Week: Our Top-Ranked Companies Are Outperforming Their Peers During the Coronavirus Crisis

Last week, we looked at the performance of JUST Capital’s Large Cap Diversified (JULCD) Index, which tracks the companies that are most dedicated to their stakeholders, and found that it has continued to outperform the market throughout the coronavirus crisis. At JUST, we create an annual ranking of the companies in the Russell 1000 based on that same kind of stakeholder dedication, and this week, we’re taking a closer look at that data set over the course of this year’s first quarter.

For our analysis, we bucketed the ranked companies into quintiles based on their overall JUST score relative to their industry (i.e. those in the top 20% of each industry are bucketed into Q5, those in the next 20% of each industry are bucketed into Q4, etc.). From here, we found the top 20% of companies in each industry have been outperforming the other 80% of companies consistently through the bear market and the first sign of recovery.

Looking at it by quintile, our top ranked companies outperformed our worst ranked ones by 4.65%.

The cumulative performance of the quintiles is as follows: Q5: -26.05%, Q4: -29.72%, Q3: -28.86%, Q2: -31.26%, Q1: -30.69%. Q5 companies outperformed Q1 companies by 465 basis points. (JUST Capital)

We’ve been closely tracking the corporate response to the COVID-19 crisis for the past several weeks. Top quintile companies like Target, Starbucks, PepsiCo, and T-Mobile have gone above and beyond for their stakeholders, through actions like raising wages for frontline workers and donating millions of dollars to struggling communities.

By investing in JUST companies during the pandemic, we continue to incentive positive change, which we’ll need to sustain. Per Morgan Stanley’s head of biotech research, Matthew Harrison, it is likely that we see the pandemic subside over the summer only to reemerge with a second wave of infections in November 2020. Harrison’s model predicts we won’t see a broadly available vaccine until March 2021, indicating that the bear market and volatility we’ve seen this year is far from over.

As the current crisis evolves, we continue to see JUST companies’ social governance contribute to better returns, higher underlying profitability (ROE), limit downside risk, and align with investor values. There has never been a better time to invest sustainably.