Prof. Dr. Leo Brecht
Member of the Board, Partner
Prof. Dr. Leo Brecht
Member of the Board, Partner
Prof. Dr. Leo Brecht is a mathematician and economist with a PhD in mathematical statistics and a professorship in innovation and technology management at the University of Liechtenstein. With over 20 years of experience in management consulting and applied research, and more than 10 years in investment management, he is a leading expert in the fields of innovation, technology and product management. Leo Brecht has supported more than 100 projects for SMEs and multinational companies in various industries, from strategic consulting to technology assessments. He is also the founder of ALPORA, where he and his team have developed innovative investment products that have led to over €700 million in assets under management. Over the last ten years, he has given more than 1,000 investor presentations. He was a partner at Andersen and Arthur D. Little, the author of several books and a conference speaker. As an active investor and serial entrepreneur, he is particularly involved in the FINTECH, SUSTTECH and EDUTECH sectors. In his free time, Leo Brecht is a passionate regatta sailor and skier and enjoys spending time with his family.
Solactive AG has announced its inaugural collaboration with Averdas AG to launch the Solactive Averdas Productivity Leaders US 1500 Index and the Solactive Averdas Productivity Leaders US 500 Index.
Developed through a data-driven, rules-based framework, these innovative indices are designed to identify U.S. companies that demonstrate superior productivity, operational resilience, and sustainable profitability, specifically positioned to withstand adverse economic conditions.
In the current landscape of macroeconomic uncertainty, productivity has emerged as a critical driver of performance. Firms capable of combining profitability with operational efficiency distinguish themselves by their ability to sustain long-term value creation. Averdas employs a proprietary methodology to target such firms, offering a differentiated lens on productivity through asset deployment, process efficiency, and financial resilience.
The Solactive Averdas Productivity Leaders US 1500 Index utilizes a rigorous three-step selection process applied to the constituents of the Solactive GBS United States 1500 Index. Initially, the methodology identifies the top 40 companies with the highest asset productivity scores, evaluating the efficient utilization of capital, labor, and technology. From this cohort, five companies are selected for their process productivity, focusing on sustainable profitability derived from structural efficiency. The remaining 25 constituents are selected based on resilience, assessing the capacity to maintain productivity amid market volatility. All selected components are equally weighted, with the index undergoing annual rebalancing. The Solactive Averdas Productivity Leaders US 500 Index applies this identical structured selection and weighting process to the Solactive GBS United States 500 Index universe.
Timo Pfeiffer, Chief Markets Officer at Solactive, commented, “We are thrilled to announce our first collaboration with Averdas on the launch of this pioneering productivity-focused index. This project showcases the power of combining exceptional research with in-depth indexing expertise to develop highly differentiated investment strategies.”
Prof. Dr. Leo Brecht, Chairman and Co-Founder at Averdas, commented, “We are proud to collaborate with Solactive in launching the Solactive Averdas Productivity Leaders US 1500 Index and the Solactive Averdas Productivity Leaders US 500 Index. Productivity is one of the most consistent drivers of long-term value creation, and this index translates our research-driven approach into a transparent, rules-based strategy that helps investors access companies combining efficiency, resilience, and sustainable profitability.”
The Power of Productivity
Productivity gains importance in the 21st century, with the primary objective to promote economic growth and ensure the delivery of investor returns. The enhancement of productivity yields dual benefits from both a macroeconomic and an investor perspective. From a macroeconomic perspective, productivity facilitates a more targeted allocation of capital to companies with greater potential for productivity. From an investor’s perspective, firms’ productivity gains engender novel opportunities for identifying companies with above-average value creation and stable return potential. It has been demonstrated that companies with strong productivity (the Productivity Leaders) can achieve higher profits and more stable returns in the long term, even in challenging macroeconomic environments with falling growth and rising or falling inflation.
Sources of Productivity
Productivity is defined as the efficiency with which resources, including labor, capital, and other assets, are utilized to generate goods or services. A robust productivity position may emerge from various sources. The primary factors contributing to this growth include, among others, significant productivity gains achieved through research and development, advanced technologies, improved utilization of current assets, and disciplined control of operating expenses. Moreover, the optimization of processes empowers organizations to achieve elevated levels of output with a constant or diminished expenditure of resources through the streamlining of operations.
These efforts yield two primary benefits:
- Diversification and risk reduction
- Enhanced predictive strength and resilience.
Measuring Productivity
The application of advanced analytics (DEA) enables the calculation of a productivity frontier across a selected universe. For the Solactive Averdas Productivity Leaders US 1500 Index, a comprehensive analysis is conducted along the following three key dimensions:
- Asset Productivity: Asset productivity serves as the foundation because it reflects the fundamental capacity of a company to generate output from limited resources. Its primary objective is to optimize the yield from labor, capital, and technology, thereby ensuring sustained growth and augmented revenue. Main KPIs include R&D, sales growth, or CapEx.
- Process Productivity: Process productivity focuses on a firm’s ability to transform structural efficiency into sustainable profitability through effective, optimized processes. The goal is to achieve profitability through the implementation of dynamic and efficient operations. Main KPIs include current assets, operating expenses, COGS, or operating income.
- Resilience: The objective of the Resilience measure is to assess an organization's capacity to adapt and recover from disruptions, thereby ensuring the stability of returns. From an investment perspective, resilience acts as a stabilizing component within the productivity construct as it mitigates drawdowns, reduces earnings volatility, and enhances the persistence of returns over time. Main KPIs are operating, financing, or investing cash flows.
These dimensions capture distinct sources of return that extend beyond the well-established style and macro factors. They provide uncorrelated returns, not yet covered by any type of tradeable index.
Backtest Results
Index Methodology:
The index selects 30 components that excel across the three dimensions of the productivity factor, and at each yearly rebalance, the securities are equally weighted.
Starting from the Solactive GBS United States 1500 Index, securities are selected as follows:
- The top 40 companies demonstrating the highest levels of asset productivity are identified in the universe and considered eligible.
- Then, within the top 40 asset leaders, 5 companies are then selected based on superior process productivity.
- Lastly, 25 companies are selected for their exceptional resilience.
Sector Allocation:
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