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Qualit y ’ s per formance acr oss
Quality’s performance across

th e business cycle
the business cycle

Polen Capital analyse how quality stocks have fared across different economic environments.
Historical analysis shows that quality stocks tend to perform better in late and recession stages.

Quality stocks have been shown in studies to have robust historical
performances.1 This analysis takes a deeper look into the Quality
factor’s performance by breaking out its history into the four stages
of the business cycle: Early, Mid, Late, and Recession.
Observing the performance of Quality for each of these unique
periods yields evidence that Quality stocks tend to perform better
in Late and Recession stages, while underperforming in Early
stages. Quality’s performance in Mid stages is also generally solid;
however, there are multiple periods in this stage where the Quality
factor has underperformed, including the late ’70s and the mid
2000s.
Continue reading Polen Capital’s whitepaper on the next
page.
1Asness, C.S., Frazzini, A. & Pedersen, L.H. Quality minus junk.
Rev Account Stud 24, 34–112 (2019). https://doi.org/10.1007/
s11142-018-9470-2.
This article was written on 03 November 2022. All prices and
movements in prices are on this date.

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