Best Luxury Good ETF? Create Your Own

The luxury good sector accounted for the largest growth in retail sale. Investing in stocks that provides goods for those with highest disposable income theoretically could be lower risk. After all the consumers of luxury goods by definition spend regardless of overall economic condition. Therefore it is no surprise that the Luxury goods sector is one of the strongest sector post the global financial crisis.

No ETF service provider has created a one stop shop for investors that want to ride the boom in the global luxury goods boom. However that does not stop individual investors use existing luxury good stock index and use the best within the sector to create their own portfolio which can act as proxy for a luxury good ETF. Leveraged gold ETFs can be used for those that are high risk tolerant investors and would like a proxy for luxury demand for gold.

We start with a luxury good index created by Dow Jones Global Luxury Index. The index tracks top 30 global luxury good stocks that are listed in the United States and Europe. Below is a list of top 10 stocks in the index.

Luxury Stock List

Luxury Brand Company Symbol Luxury Sector
Daimler AG DAI Vehicle
NIKE Inc B NKE Clothing
Diageo Plc DGE Spirits and Wine
LVMH-Moet Vuitton MC Fashion
Richemont, Cie Financiere A Br CFR Luxury Conglomerate
Bayer Motoren Werke AG (BMW) BMW Vehicle
VF Corp VFC Fashion
Pernod-Ricard RI Spirits and Wine
Las Vegas Sands LVS Casino
Estee Lauder Cos. EL Consumption Goods

 

The list shows the index consist of what can be considered the best of the best for those at the highest level of income strata. It covers a wide range of luxury goods within the sector from Clothing, Drinks, Fashion to overall Luxury Conglomerates that provide stable of luxury brands.

The list of luxury good stocks range from European powerhouses such as LMVH-Moet Vuitton, Richemont and Daimler to Las Vegas Sands. When investors think luxury BMW and Pernod comes to mind immediately, not so much for Casinos. But really if you have the money why not gamble a little.

This index is not just a proxy for a European Luxury Good ETF but a truly global exposure and diversified sector of stocks that benefit growth of the top 10%.

A European Luxury ETF

The chart below shows the country exposure if such a ETF exist. One can see that combined weights of stocks listed in Europe comprise the largest exposure at 72%.

It is really just a European Luxury Good ETF

It is really just a European Luxury Good ETF

Unlike the Dow ETF which track the broader Dow Jones Industrial Average. The luxury good index would be a sector concentrated ETF. Investors should base investing in these stocks a part of the broader portfolio rather it be the only stock in the brokerage account.