The UX Fund is an investment experiment conducted by Theehan+Lax user experience consultants. They believed that companies that deliver a great user experience would see it reflected in their stock price. So they selected 10 companies with a great user experience, using the following criteria:
1. A demonstrated care in the design of their products and Web site
2. A history of innovation
3. They inspire loyalty in their customer base
4. Doing business with them is a positive experience
Subsequently, on November 1, 2006, they invested $50,000 USD (about $5,000 in each company) into Apple, EA, Google, JetBlue, Netflix, Nike, Progressive Insurance, Nike, Research in Motion, Target, and Yahoo. Shares were held for 1 year; they did not adjust the portfolio meanwhile.

The experiment closed on November 6 2007, at which point it had a 39.3% revenue, outperforming major indexes like NASDAQ, S&P 500, DOW, NASDAQ, and NYSE (see figure above). Even though the stocks were sold, the performance of the UX fund can still be tracked, and while I am writing this, in the aftermath of the credit-crisis, the fund is still outperforming the other indexes, having achieved a +15.73% interest since November 1, 2006. The runner up is the NASDAQ 100 index, which at +3.94% is the only index that has a positive score.

Admittedly the experiment may have had some deficiencies. For example, user experience may not have been the one variable that set the selected companies apart from their peers. Maybe the researchers simply chose 'blue chip' stock, that had been performing well over the last years, and thus might be expected to continue to do so. And to me - being a complete non-expert on investing in stocks - the stock portfolio seems a bit light in terms of 'financials', who suffered greatly from the credit crisis, which may explain the large difference in performance over the last year, but not in the time when the actual experiment was run (up until November 6 2007).

However, apart from grievances you may have about the setup, the notion of companies with a good user experience outperforming others is interesting and seems to have some merit. I would love to see user experience specialists and investment researchers team up to do a more extensive (more stocks) and rugged version of this experiment.

[Via: productquadrant]