Brand power: why it makes sense to invest in brands

According to Rory Sutherland, vice chairman of global advertising giant Ogilvy and Mather, we underestimate the importance of emotion when we think about products and services. “We don’t value things; we value their meaning,” says Mr Sutherland. “What they are is determined by the laws of physics, but what they mean is determined by the laws of psychology.”

This insight – that the products and services we buy are much more than functional - underpins the whole power of brands. As Nik Dvornak, Portfolio Manager for the Platinum International Brands Fund recently wrote, “…consumers don’t just want sandals, they want Birkenstocks.”

According to Rory Sutherland, brands help take away the anxiety we feel when we buy things. But the brands we buy are also a way of expressing ourselves. Of telling ourselves - and others – who we are.

For all these reasons, strong brands are assets and some are worth staggering amounts of money¹.

1. Apple – its brand is worth over one trillion USD, the first brand in history to beat that mark.

2. Google – worth over USD750 billion

3. Microsoft – worth over USD700 billion

4. Amazon – to buy the online retailer’s brand would cost you around USD570 billion

5. McDonalds – after 44  year of selling burgers, McDonald’s brand value tops USD220 billion.

Because brands are valuable assets and can add predictability and resilience to a company’s financial performance, investing in companies that own strong brands can be a pathway to solid returns over the long-term.

In the video above Nik Dvornak explores the power of brands and explains the philosophy behind the Platinum International Brands Fund, a fund which has averaged an 11%pa return since inception in 2000 (as at 31 December 2024).