eToro launches LuxuryBrands, a portfolio based on the luxury goods market

eToro, the social investment platform, today announced its launch LuxuryBrands - the latest addition to the Smart Portfolios Thematic Package, offering investors long-term exposure to the luxury goods industry. This is another interesting novelty on the list of ready-made investment portfolios available on eToro. Only two weeks ago, it was introduced to the offer BatteryTech - a product that gives exposure to companies in the battery industry.

LuxuryBrands - exposure to the luxury goods market

The luxury goods market has always resisted fleeting fashions, retaining the necessary value and attracting customers, thereby providing itself with key price power.

"Despite the pandemic-induced cuts in discretionary spending, luxury brands have definitely rebounded and more than retained their value in a world of rising inflation." - He said Dani Brinker, head of investment portfolios at eToro.

“Their timeless nature made them resistant to changes in consumer demand. And after a contraction in 2020, the market grew by 2021 to 13 percent in 15 to a value of € 1,14 trillion.  

Ben Laidler, Global Markets Strategist at eToro, comments:

"Luxury stocks performed well during the pandemic, both in terms of 'narrow' luxury such as fashion, leather, beauty, and 'broad' luxury, including cars, alcohol and sportswear. They enjoy strong brands, large profit margins, and non-cyclical growth factors such as exclusivity and status. All this is conducive to high valuations and trends that will continue regardless of market volatility. "  

E-commerce strengthens the industry

The accelerated growth of e-commerce has strengthened the position of luxury brands and online stores have become the engine that revitalized the sector. Monobrand online stores now account for almost half (40 percent) consumer points of sale.

“China satisfies a third of the demand for luxury goods, and its zero-covid policy increases exclusivity and prices, which in turn affects the revenues of luxury brands. The growing importance of sustainable development, supply chain integration and multi-brand luxury conglomerates increase market entry barriers for disruptors, and a weak euro additionally cushions high profit margins. As a result, luxury brands will thrive in the post-covid world " - he adds Ben Laidler.

To reflect the diversity of sectors in the industry, LuxuryBrands Smart Portfolio showcases a highly thematically diversified selection of 25 stocks, including brands such as Ferrari, Hermes and Marriott International, parent company of Ritz Carlton and St. Regis. It also offers access to fashion industry parent companies such as LVMHto which they belong Tiffany & Co. and Louis Vuitton; Kering, holding company Gucci, Saint Laurent i Balenciaga; and Richemont Group, which is the owner of a jewelery brand Cartier and a watch manufacturer IWC. A complete list of companies can be found here.

Simulation of historical results of the LuxuryBrands portfolio in 2018-2022. Historical results do not guarantee the achievement of similar results in the future! Source: eToro.

Dani Brinker concludes:

“By placing selected stocks in a ready-made portfolio, we enable our clients to invest in specific areas and gain exposure to the markets while maintaining significant diversification in the automotive, textile and household appliances sectors. By investing in LuxuryBrands, our clients will be able to contribute to one of the most timeless consumer goods segments in the world. "

READ: How to invest in luxury alcohol? [Guide]

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