Writer: Greg A. Sager
There are several benefits to investing in small production companies versus other sectors. Investment in film, unlike real estate and the stock market, has a low correlation to the health of the domestic and global economy. Content from Independent production companies account for fifty (50%) of theatrical and video sales/rentals.
In a five year compounded annual return comparison, small production companies outperformed the S&P 500 by 28.7%, compared to 4.5% for the Vanguard S&P 500 Index Fund. Motion Pictures vs. the S&P 500: 5-Year Compounded Annual Return.
According to data supplied by Morningstar on mutual fund asset classes, small production companies have a significantly greater compounded average annual return than any other mutual fund. According to Morningstar research, a hypothetical investment of $10,000 dollars in the average small motion picture company would have grown to $35,000 over the last 5 years, almost triple that of an S&P 500 index fund.
January 29, 2018