After the Claymore consumer luxury goods exchange traded fund closed up shop in 2010, U.S. Global Investors, along with ETF Series Solution, a white label ETF service provider, is bringing back the sub-sector theme.
According to a recent Securities and Exchange Commission exemptive relief filing, ETF Series Solution and U.S. Global are working on the U.S. Global Luxury Goods ETF. No ticker or expense ratio has been provided yet.
The new luxury goods ETF will try to reflect the performance of the U.S> Global Luxury Goods Index, which is comprised of global luxury companies that cover a range of market segments, high-end apparel, accessories, cosmetics, home furnishings, eyewear, jewelry, premium alcohol, automobiles, aircraft, travel and professional services, among others.
The ETF will also have a smart-beta component to the underlying index. Specifically, company holdings are screened for liquidity and scored based on revenue growth per share, share price movement and their price-to-cash flow ratio. Only about 40 companies with the top composite scores are included in the index.
Despite the recent market swing, high-net-worth consumers remain unfazed and have continued to hit boutique shops.
“Let’s face it,” Michael Ward, the managing director for Harrods, told the New York Times. “The bulk of luxury consumption by value is made by high-net-worth individuals who can afford to lose some money on the stock market without changing their lifestyles too much or thinking twice about purchases.”
The luxury investment theme has been around. Previously, before Guggenheim Investments bought out Claymore, the old ETF provider offered the Claymore/Robb Report Global Luxury ETF, which followed an index developed by the Robb Report, a luxury lifestyle magazine.