July 24, 2008 at 1:00 am by Timothy Hubbard
Despite the Claymore/Robb Report Global Luxury (ROB) exchange traded fund (ETF) seeing negative returns, one component of this fund is creating a good buzz. Vintage champagne has outperformed most investments over the past year and is rather heavily weighted in this ETF.
LVMH, which makes Moet & Chandon and Veuve Clicquot Ponsardin is 4.7% of ROB, while Pernod Ricard, maker of Perrier-Jouet, is 4.6% of the fund.
Champagne’s staggering performance is mostly because of the fact that more newly rich people are drinking it, such as Russian and Chinese entrepreneurs. However, sales are holding up well even in slower western markets. As Stephen Beard reports for Marketplace Public Radio, more and more investors have been drawn to vintage champagne, which push prices even higher.
With the term “champagne” used to characterize many kinds of sparkling white wines in many western markets, a true champagne is only produced in the Champagne region of France. The value of a true vintage champagne is enhanced in a competitive market with generic imitators.
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