While the average exchange traded fund (ETF) investor might have cut down on his or her consumer spending, the same can’t be said for the ultra rich. Household wealth is hitting record heights, and it’s not happening just in the U.S. There are more millionaire households in the world than ever before, reports Maya Roney for BusinessWeek:
- The total number of world millionaire households, which is those with assets of $1 million or more, grew by 14% in 2006, owning about a third of the world’s wealth.
- The U.S. had, by far, the highest number of millionaire households, with nearly 4.6 million, and the highest number of $100 million-plus households, with 2,300.
- The number of millionaire households increased by a steady 10%, while $100-million-plus households grew by 7%.
- The number of millionaire households increased the most last year in China (up 39%), Spain (up 32%) and Britain (up 30.5%).
- In Europe, the number of millionaire households grew by 26.4% in 2006, the highest of any region in the study, helped by its strong currency against the weakening U.S. dollar.
This research is important because roughly 60% of total U.S. spending is by the top 20% income earners, says Carl Delfeld for ETF XRAY. Their purchasing power is unlikely to pull back sharply. Second, the growth rate of wealthy individuals from emerging nations is absolutely staggering, and they want the best.
For investors who see this growing trend as an opportunity might want to consider the Claymore/Robb Report Global Luxury (ROB) ETF. 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. It currently has 42 companies in its basket, and 72% of them are based in the U.S., France and Switzerland. It has a higher expense ratio of 0.7%, and it’s currently up 5.2% for the month, having launched in July. The top three holdings and their weightings include Daimler Chrysler (DAI) at 5.6%, Compagnie Financiere Richemont at 5.4% and Louis Vuitton at 5.4%.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.