Contrary to concerns expressed by many observers, we found no compelling evidence of a negative impact from share buybacks on long-term value creation for investors overall. We did find, however, that buybacks can impact long-term investment returns differently for active and index investors. Over the periods we observed, Companies where index investors were the largest shareholders included a much wider range of buyback impacts, good and bad, than companies where the largest shareholders were buy-and-hold investors; on average, total returns for companies where buy-and-hold investor were the largest shareholders were 18% higher than for index investor companies from 2007 to 2016.
COVID-19 has led to a new appreciation of the importance of healthcare in ensuring all members of society thrive. So where should investors be looking to find resilience in an industry facing enormous change?
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