October 02, 2007 at 1:00 am by Tom Lydon
Is there an exchange traded fund (ETF) that tracks the spending habits of the rich?
Indeed there is: This summer the Claymore/Robb Report Global Luxury Index ETF (ROB) launched, and it has a higher expense ratio of 0.70% to match its pricey holdings. The ETF tracks the Robb Report Global Luxury Index that is made up of companies whose primary focus is to sell luxury goods and services. With only 40 holdings in the index, the U.S., France and Switzerland dominate this index, reports Zoe Van Schyndel for The Motley Fool. Currently, it’s up 7.6% for the month.
If the economy dries, luxury companies might not wilt as much as others because big spenders tend to shop no matter how the economy is doing. The bigger risk is that the fund is highly concentrated. Daimler Chrysler (DAI), Nordstrom (JWN), Polo Ralph Lauren (RL), and Wynn Resorts (WYNN) are just a few of the high-end names ROB drops. Ensure this ETF fits your portfolio’s needs before purchasing.
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