Long-Term Shareholder Returns: Evidence from 64,000 Global Stocks
101 Pages Posted: 14 Oct 2020 Last revised: 21 Oct 2020
Date Written: October 12, 2020
We study mean monthly returns and compound long-run returns to over 64,000 global common stocks during the January 1990 to June 2020 period. We highlight the important practical distinctions between arithmetic, geometric, and dollar-weighted monthly returns. We also document that the majority, 56.6% of U.S. stocks and 61.3% of non-U.S. stocks, under-perform one-month U.S. Treasury bills in terms of compound returns over the full sample. Focusing on aggregate shareholder outcomes, we find that the top-performing 1.5% of firms account for all of the $US 56.2 trillion in net global stock market wealth creation from 1990 to mid-2020. Outside the US, less than one percent of firms account for the $US 20.1 trillion in net wealth creation.
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