New data sheds some light on the sectors generating the most added wealth for shareholders around the world.

Figures shedding light on wealth creation by some of the world’s most prominent firms shows that technology, media and telecoms businesses are the most potent drivers of total shareholder returns, with US companies in the driving seat.

The study, produced by Boston Consulting Group, gives rankings based on a total of about 2,350 companies around the world, from 2012 through last year. About 30 per cent of the firms are based in the US.

Among the world’s 200 largest companies, the top ten value creators for the five-year period delivered an average annual total shareholder return of 41 per cent, with a range of 66 per cent to 30 per cent. The average annual TSR for the next ten best companies was 29 per cent. The overall average annual TSR for all the 2,350 companies in the BCG database was 16 per cent, well above the long-term average of about 10 per cent for the S&P 500.

The data may also be useful data for wealth managers seeking not just to bolster client portfolios, but to help track potential future liquidity events if or when these companies’ shares are sold by specific individuals. Such figures might also suggest that active pursuit of high-performing firms, rather than a purely “passive” approach, makes sense, or at least may reinforce the case for “smart Beta” strategies where securities are chosen for possessing certain return-generating qualities.

By sector, TMT [technology, media and telecoms] companies hold seven places on the latest list of top performers while pharma, which claimed four of the top ten slots in 2016 (including the top three) and five in 2015, is absent, Boston Consulting Group said. 

BCG has put out this annual ranking of top value-creator firms since 1999, using a five-year period to calculate total returns. TSR are a mix of share price gains and dividend yield. 

In addition to assembling the five-year rankings, BCG looked at long-term and consistent value creation. From 1996 through 2016, nine companies among the largest 200 have been top-quartile value creators in at least three of the four five-year periods. They top the consistent value creators list for the past two decades because they generated average annual TSR numbers of 17 per cent to 32 per cent a year over 20 years. Two are pharma companies, two are tech firms, and two are tobacco companies. One comes from media and publishing, and one from health care. Amazon straddles tech and retail. Seven are based in the US, one in the Netherlands, and one in South Africa.

Turning to individual firms, the top-ranked value creator, measured by average annual TSR, was Netflix (65.7 per cent), followed by NVIDIA, a tech firm, at 52.6 per cent, and in third spot, Tencent Holdings, the Chinese investments group holding media and publishing concerns, at 47 per cent. Other firms, in descending TSR scores, are Broadcom (Singapore); Charter Communications (US); ASML (Netherlands); Amazon (US); Bank of America (US); KDDI (Japan), and Charles Schwab (US).