Global luxury ETFs: Making the exclusive more accessible
Marketing Communication
If someone says ‘luxury’, what do you see? A pair of expensive shoes, a designer handbag or a sports car sparkling in the sun? Whatever springs to mind, the global luxury sector is epitomised by exclusive products and an aspirational customer base – with an insatiable appetite for beautiful things.
Perhaps nothing represents luxury more than the Hermès Birkin bag. The Birkin is notoriously hard to get hold of, with a purposefully restricted supply, a long waitlist and extraordinary secrecy around how to purchase one directly from Hermès. This drives the resale price of the bags sky-high; they often re-sell for double the retail price1, with one rare model selling for around £350,000.2 In fact, from 1980 to 2015, the price growth of the Birkin outperformed both the S&P 500 and the price of gold.3 The bag’s continued popularity demonstrates the power and allure of luxury brands.
Worldwide luxury spending by segment in 2023 ($ billions)
Source: Bain & Company esimates for 2023, as at January 2024
However, if an exclusive waitlist and a six-figure price tag aren’t your style, you could still find a way to invest in this market segment through an ETF such as the Amundi S&P Global Luxury Exchange-Traded Fund (ETF), which tracks the performance of the S&P Global Luxury Index.
The luxury sector has performed well over the past 10 years, despite market fluctuations,4 with 2024 proving to be a challenging year. According to Bain-Altagamma estimates, global luxury spending reached €1.5 trillion in 20245, an estimate putting the year at the same level as 2023.
The outlook for the luxury sector varies across regions. Emerging markets could offer growth, according to Bain-Altagamma, with Latin America, India, Southeast Asia, and Africa expected to add more than 50 million upper-middle class luxury consumers by 20306.
Luxury spending in the US was on upward trend in 2024, while Japan and southern Europe experienced strong tourist inflows. In contrast, China experienced a slowdown through the year7.
If an exclusive waitlist and a six-figure price tag aren’t your style, you could still find a way to invest in the theme
The S&P Global Luxury Index is made up of 80 of the largest listed companies that produce and distribute luxury goods. Around 89% of the index is in consumer discretionary stocks (non-essential goods and services, such as luxury products), with 11% in consumer staples (this includes goods and services such as foods and beverages; hygiene products; and alcohol and tobacco).
The Amundi S&P Global Luxury UCITS ETF seeks to replicate the performance of the S&P Global Luxury Index. The fund gives you diversified8 exposure to companies in the luxury sector, as you will be investing in the index’s constituents through the purchase of a single fund. That’s without mentioning the additional diversification9 that luxury stocks can offer as some companies in this sector own multiple brands.
As they are traded on stock markets, ETFs can be bought and sold easily. There’s no obligation to remain invested in an ETF – you could sell at the current market value at any point.
Luxury brands’ enduring appeal and growth potential are attractive for investors wishing to diversify their portfolios and benefit from consumers’ desire for exclusive products. The Amundi S&P Global Luxury UCITS ETF offers investors the opportunity to harness the growth potential of the luxury sector – without the luxury price tag.
*Management fees refer to the management fees and other administrative or operating costs of the fund. For more information about all the costs of investing in the fund, please refer to its Key Information Document (KID). Transaction cost and commissions may occur when trading ETF.
1 The Birkin bag | How and where to buy Hermès' most iconic design (harpersbazaar.com)2 The Top 6 Most Expensive Hermès Birkin Bags | Handbags & Fashion | Sotheby’s (sothebys.com)3 Why The Hermès Birkin Bag is a Better Investment Than Gold | TIME4 S&P Global Luxury Index | S&P Dow Jones Indices (spglobal.com)5, 6, 7 Global luxury spending to land near €1.5 trillion in 2024 | Bain8 Diversification does not guarantee a profit or protect against a loss.9 As above.
