Indices over 3-yrs
Source; FE Analytics
Our data shows the S&P Composite 1500 Apparel Accessories & Luxury Goods index returning 256.4 per cent over the past three years, while the Textiles Apparel & Luxury Goods index returned 12.5 per cent. Over the past 12 volatile months the indices have returned 14.1 per cent and 10.6 per cent respectively, while the overall S&P1500 returned 1.59 per cent.
But it can be hard for investors to gain exposure to the sector. Here, we take a look at some collectives which invest in the likes of Louis Vuitton.
JB EF Luxury Brands
This €96.5m SICAV has a Four Crown rating from FE, and the best returns over a three year period. Launched in January 2008, the fund includes Tiffany & Co, Swatch and LVMH – Louis Vuitton’s parent group – in its top ten holdings.
The fund, which is run by Andrea Gerst, has a similar volatility to its peers over a three year period; 21 per cent. That risk level seems consistent, or as consistent as we can measure given it has a three year track record. Its volatility over the past 12 months is also 21 per cent.
It has returned 110 per cent over the past three years at an FE Risk Score of 136.
In the fund’s latest note Gerst said slow but solid growth was still expected for luxury goods in the coming months ahead.
“There are more and more potential luxury consumers as the purchasing power of emerging markets consumers is rising,” the manager said.
Pictet Premium Brands
Another strong performer over the three year period, this €482.6m Luxembourg-domiciled fund has a Four Crown Rating from FE. The fund was launched in 2005 so has one of the longest track records of the luxury funds.
Since launch, the fund has returned 46 per cent, but over the past three years it has done especially well, returning 95.3 per cent. Its FE Risk Score is 138.
Tiffany and LVMH again appear in the top ten, alongside sporting giant Nike and chav-favourite Burberry.
Dominion Chic
With £22.2m under management, this Five Crown rated fund has returned 71.9 per cent since its launch. It managed these returns with an FE Risk Score of 94, making it slightly less volatile than the FTSE 100.
Its top ten holdings include chocolate bunny makers Lindt & Spruengli, and clothing group Abercrombie & Fitch – which has become part of the core uniform for those in reality tv show Jersey Shore – in its top ten holdings.
Reviewing the fund at the end of the summer, Standard & Poor’s said the fund has a growth focus, but can show high volatility at times of market stress. This was seen in its high drawdown during the period from July 2008 to the stat of March 2009. The fund has addressed this, and now uses a volatility-based stop-loss and VIX ETNs.
Amundi Equity Global Luxury and Lifestyle, and Clariden Leu Luxury Goods Equity
These two funds also offer investors exposure to luxury goods, but the Amundi fund has had lower returns – 61 per cent over three years – while the Clariden fund only has a one year track record.
The Amundi fund has also been more volatile than its peers; 30 per cent compared to around 21 per cent from the other vehicles. There is not enough of a track record to note the volatility from Clariden.
The Amundi fund includes Ralph Lauren and Christian Dior in its top holdings, while Clariden Leu makes a feature of Hermes and LVMH.