BNY’s Market Insights and initiatives team surveyed 40 institutional investors
In today’s competitive capital markets, crafting a compelling equity narrative is more than a communications exercise; it is a strategic imperative.
But what distinguishes the enduring from the generic? BNY’s Market Insights and Initiatives team, in partnership with S&P Global, surveyed 40 institutional investors across six continents, representing $2 trn in equity assets under management, to answer this question.
Setting the stage: what investors want
The survey’s findings are clear: investors seek clarity, consistency, and credibility. They want to understand not just the numbers, but the story behind them. As one tier-one North American investment manager said: ‘I don’t want just another company. I want something unique. The question is whether they are a dominant company or just ‘yet another company’.
Key highlights of the survey include:
- Clear, consistent disclosure of financials is essential
- Strong management and governance are key differentiators
- Lasting advantages and macro perspectives make narratives compelling
- Long-term vision must be balanced with short-term outlook
- Active engagement – site visits and CEO interaction – builds credibility
- Authentic ESG integration matters more than box-ticking
- Strategic shifts should be communicated outside the quarterly cycle, with depth and context.
The four S’s of a compelling narrative
Investors emphasized four thematic elements – the 4 S’s – as the foundation of a strong equity story:
- Simplicity: Avoid overwhelming presentations; clarity and straightforwardness win
- Strategy: Clearly articulate vision, competitive landscape, business model and execution
- Segmentation: Break down performance by geography, segment, division or asset
- Substance: Highlight key financial and projected trends, supported by evidence.
Beyond valuation: what really drives decisions
Surprisingly, only 35 percent of investors cited valuation as a primary factor. More important were competitive landscape, durable advantage, market position and management strength. Investors want to see a company’s ‘structural moat’ – its ability to sustain its business model and fend off competition. They value management’s track record and adaptability.
Credibility and clarity are recurring themes. Investors look for data-backed claims, balanced information and transparency about risks. They are cautious of unsupported buzzwords and hype, preferring substance over style. Inconsistent or opaque disclosure erodes trust.
Innovative approaches: back to basics
When asked about innovation in equity storytelling, investors prioritized clarity and honesty over flashy techniques. Consistent, detailed disclosure remains the gold standard. The survey suggests companies should focus on the fundamentals of investor relations: clear and simple information delivered authentically.
Core elements of a credible equity narrative
Investors expect a blend of qualitative and quantitative information:
- Company idiosyncrasies: Define growth potential, competitive edge and leadership
- External context: Explain market environment, structural tailwinds and peer comparisons
- Numbers matter: Offer transparent financials, past, present and future
- Corporate governance: Demonstrate leadership, decision-making, and capital allocation aligned with shareholder interests.
Balancing macro and micro
While company-specific narratives are crucial, broader economic context also matters. Most investors prioritize long-term vision, framing short-term results within strategic objectives. Macro factors are part of the picture, but fundamentals dominate. Companies should credibly embed themes like technology adoption and address macro risks thoughtfully.
Practical recommendations for non-US issuers
For non-US companies targeting North American investors, the message is clear: tailor your equity story to emphasize data, clarity and credibility. Highlight management quality, track record and shareholder alignment. Balance macro context with bottom-up insights, use realistic assumptions and engage investors directly.
A compelling equity narrative should provide a clear vision of what management aims to achieve, supported by detailed plans and credible data. It should also address potential challenges and outline strategies for overcoming them. In contrast, a generic narrative often lacks depth, relies on buzzwords and fails to provide meaningful insights into how the company plans to achieve its goals. Ultimately, a strong narrative instills confidence in management’s ability to deliver on their promises.
Global investment manager, mutual fund
Ready to dive deeper?
This survey offers a roadmap for issuers seeking to elevate their equity narrative and capture investor interest. For the full analysis– including detailed survey responses, practical tips and more – read the complete report.
For additional questions, contact your BNY team and visit our updated depositary receipts page on BNY.com for more information.
Karen Bodner is head, market insights and initiatives at BNY’s depositary receipts team
