Tuesday May 24, 2022

Go for the rich and their desire for luxury goods

With the growing consumerism of society, the desire and ability of people to own luxurious, special, deadly inaccessible goods grows. In the wake of God, the first mortals can eventually make sense.

The market for luxury goods has literally boomed in recent years, and the purchase of goods used to distinguish and demonstrate social status is still a popular activity among wealthy people. Recently, even those who do not belong to the richest have been dreaming of this segment. Investing in companies that produce luxury goods, however, allows them to increase their own wealth at least a little.

Investors who are trying to make a name for themselves in the luxury goods market are based mainly on interesting data from recent years. The volume of the luxury goods market has been regularly growing in double digits in recent years and should exceed USD 150 billion by the end of the decade. Thanks to the strong global economy, the number of very wealthy people (owning property without real estate exceeding USD 1 million) and their property is growing rapidly (by 2011 it should exceed a total of USD 51 trillion). Especially in countries like India and on, the number of gods who are willing to pay large sums of luxury is growing rapidly. Companies producing luxury goods react to this situation and still focus on these markets.

The demand for luxury goods, however, is constantly growing around the world. People who “have it”, practically no matter how many objects their costs, and this very low sensitivity to price changes (inelasticity of demand) in wealthy people, then allows the companies themselves, which offer luxury goods, to achieve a small profit and at relatively low sales volumes. The profit margins of such companies then fluctuate in levels that companies can keep talking about.

The advantage of investing in luxury companies may also be the fact that companies that produce luxury goods represent virtually several sectors in the stock market. These are mainly areas such as copper, various accessories, cosmetics and perfumery, cars, the food industry (especially spirits, vials, etc.) or electronics, and more recently (hotels, golf, etc.).

With input, the risk increases

However, investing in “luxury” companies carries risks. The validity of these companies depends on the breeding of relatively small groups of people. Changes in the mood in these groups can then significantly affect the demand for selected products, although the demand for common products may not change at all. They may also be adversely affected by the economic crisis in luxury companies, when the demand for luxury goods will fall sharply. On the other hand, there is an opinion that the rich will have enough pensions even in unfavorable periods and their demand for luxury may not decrease.

Graph of growth of the luxury goods market in recent years and forecasts for the coming years

Zdroj: Bain & Comp, Lehman Brothers, MSNBC

Where to invest
The easiest way to invest in an event, such as LVMH (Louis Vuitton Mot Hennessy SA), Porsche, Tiffany, Christian Dior, Remy Cointreau, Valentino, Davide Campari, etc., is to buy an event on the stock exchange. This opportunity is mediated by securities traders, who today have easy access to the most famous stock markets around the world. Brokerage firms also allow the purchase of structured products (such as index certificates), which allow diversification into more than one security within a single security.

Na vbr is for example a certificate S-BOX Luxus & Lifestyle Index, which invests in the 20 largest and most well-known “luxury companies” (three times a year on the basis of the market situation). A concentrated portfolio of eight stocks will offer a certificate due in 2014, Luxury Active Basket Certificate 2 from WestLB. Its portfolio is regularly changed twice a year. You can find a wide range of all types of certificates on the pages of the Zertifikate Journal.

One of the possibilities to make money on companies that focus on the production of luxury goods are catch funds. Unfortunately, their offer is somewhat limited in our country, and investors in foreign monks in particular come to the world.

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Only the fund could be of interest to koruna investors P Invest Globlnch znaek, which when selecting a title in the portfolio, emphasizes the company’s position in the market and the value of the characters. Its portfolio consists of hundreds of events, which Kadoron develops by Interbrand. The fund is intended for dynamic investors with a very long investment horizon. Upon entry, the investor pays a maximum fee of 0 – 4%, the management fee is 2%.

Fond SGAM Fund Equities Luxury and Lifestyle from Socit Gnrale (available to us through Komern Bank) is available in USD. It invests in companies that offer luxury goods and services from various fields, such as perks, perfumes, copper, hotels, cars, alcohol, tourism, etc. Investin company is looking for a company that In the future, they will be among the most valuable. ”The entry fee is 4% of the investment and the entry fee is 2%.

The second fund available in USD is Parvest Global Brands from BNP Paribas, which, in addition to the typical representatives of luxury goods, invests in events in the field of art and especially in leisure companies, such as hotels and travel companies. When buying share certificates, the investor pays a fee of a maximum of 5% and for the first time the investment company rays 1.5%.

The first fund available in the common European currency is AAF Durable and Luxury Goods Fund lähde: ABN Amro. The fund invests in the following sectors: automobiles and automotive systems, clothing and clothing, luxury goods, hotels, restaurants, leisure facilities and media. The pension is mainly used in companies in Europe, North America and Asia and the Pacific. The entrance fee is max. 5.25%, the fee for the first time is 1.5% ron.

The second fund that can be purchased in EUR is CS Global Prestige lähde: Credit Suisse. The portfolio is based on French companies in the fields of consumer goods, watches, cosmetics and leisure. For the first fund, the investor pays a fee of 1.92% ron, when buying a maximum of 5%.

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